New arrangements for PAYE reporting came into operation on 1 January 2019, representing the most significant reform of the administration of PAYE since its introduction in 1960. The changes mean that every time employers pay their employees, they report the pay and statutory deduction details to Revenue as part of the payroll process.

The co-design approach for the new system saw Revenue engage extensively with employers, payroll professionals, tax practitioners, tax and accountancy bodies, business representative organisations and payroll software developers. As a result, real-time PAYE reporting is seamlessly integrated into the payroll system, bringing significant streamlining of business processes and a reduction in administrative burden and costs for employers. The co-operation of the various stakeholders in collaborating with Revenue to deliver PAYE Modernisation was central to the success of the project.

The extensive engagement and communications initiatives adopted by Revenue helped to ensure that the vast majority of employers and payroll service providers were prepared for the go-live and successfully integrated the new reporting requirements into their processes. Revenue fully acknowledges the efforts made by employers, agents and other key stakeholders to implement the new arrangements.

Statistics

To date, approximately 5.3 million payroll submissions have been successfully filed for over 2.7 million employees. These figures encompass a range of payroll sizes, from the largest employers in the State to sole traders and micro-businesses.

Enhancements to online services for PAYE customers

To ensure that its customers benefit from the availability of real-time information, Revenue continues to make enhancements to its online services. Recent enhancements to its online service, myAccount, allow customers to:

• View their pay, tax, USC and PRSI details as reported by their employer;
• Download a secure document summarising pay and statutory deductions;
• Claim an unemployment repayment;
• Update their civil status; and
• Upload supporting documentation for a claim.

Pay and Tax Summary

This online service allows customers to create a secure document summarising their pay and tax details. The summary is password protected. It allows customers to manage access to their information. Customers can securely transfer this summary electronically as proof of income to any person or body, such as a financial institution, a solicitor or local authority. It can be used for the purposes of applying for a loan, mortgage, grant or similar applications.

The summary document can include one or all of the following:

• Pay and tax details for the current year-to-date;
• Full details of payments received from an employer(s) for the last one to three months; and
• Statement of Liability for the last four tax years.

Customers can select which information they wish to include.

Employers are reminded that the quality of the data which is reported to Revenue should be accurate and timely. 2019 data can be viewed by employees and will be included in an employee’s End-of-Year Statement. Financial institutions will also rely on this data as proof of income.

Employment Summary Detail (P60 replacement)

One of the benefits for employers as a result of PAYE Modernisation is that they are no longer obliged to provide employees with a P60. From 1 January 2020, Revenue will make an Employment Detail Summary available to its customers. It will be accessible through ‘PAYE Services’ in myAccount. This summary will replace the P60. This document will contain the pay and statutory deductions for each employment or pension held during the year. It can be downloaded or printed and used where proof of income is required by a third-party and can be used in the same manner as the P60 was previously used.

Statement of Liability

A preliminary End-of-Year Statement will be made available to all PAYE customers from 15 January 2020. This statement will be based on the income and statutory deductions reported by employers/pension providers and any other income known to Revenue. It will indicate whether the customer has paid the correct amount of tax for the year. Following the issuing of a preliminary End-of-Year Statement, if a customer wants to make additions, amendments or corrections to the information included on the preliminary statement, he/she must complete and submit and an online income tax return. Revenue will then issue a Statement of Liability to the customer.

Requirements in a week 53 scenario

Employers should indicate on each payroll submission the expected number of pay dates for that year. Section 480B Taxes Consolidation Act provides that in a week 53 scenario, specified tax credits will be increased by 1/52. The data reported by employers on the payroll submission will be used in the calculation of each employee’s Statement of Liability. Employers must therefore ensure that the information reported is correct throughout the year. Where an employer changes pay dates during the current or previous year, the employee will not be entitled to the additional 1/52 of the additional tax credits or rate bands.

Section 985B

Section 985B, Taxes Consolidation Act 1997 allows employers to make a PAYE settlement of the tax on non-cash benefits provided to employees on the condition that the benefits are minor and irregular.

Where the conditions for the operation of this section are satisfied, a new payment facility will be available to employers in ROS from January 2020, once the settlement has been approved by Revenue.

Transitioning from 2019 to 2020

Revenue Payroll Notifications (RPN) for 2020 will be available for download by employers in the first week of December 2019. It should be noted that a 2019 RPN must not be used in 2020 in accordance with the Income Tax (PAYE) Regulations 2018.

RPNs should be requested for all employees under each employer registration number for the first payroll run of 2020. Where there is no RPN available, the emergency basis must be operated.

Employers are also advised not to make payroll submission with a 2020 pay date until the 2020 RPN is available. The emergency basis must be applied to the payment otherwise.

It should also be noted that payment dates for 2019 and 2020 must not be included in the same payroll submission. Payment dates for different years must be made in separate payroll submissions.

Changes and tips for 2020

Acting on feedback received from employers and agents, from 2020 onwards, Revenue will mark RPNs for employees that have ceased employment when returning all RPNs. This means employers can distinguish which RPNs are for employees no longer in the employment and which ones are for employees who are still employed.

Employers should note that employment IDs should not be changed from one year to another. Employment IDs assigned in 2019 remain the same for 2020.

It is always the employer’s responsibility to inform Revenue when an employee starts in their employment and employees are not required to do so, unless it is the employee’s first employment in the State. In these latter cases, the employee should use the ‘Jobs and Pension’ facility in myAccount to notify Revenue.

Further information on these changes can be found on www.revenue.ie/en/employing-people/paye-modernisation/index.aspx

Sinead Sweeney is the Change and Communications Manager for the PAYE Modernisation project.

Kathryn Hynes is a Team Lead on the Change Management team for the PAYE Modernisation project.