PAYE Modernisation is commencing on 1st January 2019. PAYE Modernisation will not change the way that employers calculate PAYE and other payroll taxes. It simply means that employers will need to report pay and statutory deductions to Revenue in respect of each employee as and when they are paid i.e. in real time. Revenue has already commenced sending communications to employers to prepare them for the upcoming changes.

PAYE Modernisation will apply to every employer in Ireland, large and small, and putting together a good plan will be crucial to ensure a smooth transition process.

Ahead of the implementation of PAYE Modernisation, it is important for employers to ensure that the personal details of all their employees are up-to-date and accurate, which would include first name, surname, address and PPS number. Employers must have an updated Tax Credit Certificate (P2C) for all employees.

Upon receipt of a request from Revenue, employers will be required to submit a list of employees by the end of October using Revenue’s Online Service (ROS). This list must be accurate to ensure Revenue and employer records are aligned in preparation for PAYE Modernisation.

PAYE Modernisation - Key Terms & The New Process

Under the new system, employers will log on to Ros to check for the RPNs and submit their payroll.

Revenue Payroll Notification (RPN):
Employers will need to check for RPNs each pay period, this will replace the current tax credit retrieval process (P2C). RPNs can be requested using your payroll software or through ROS and will be available from mid-December.

Application Programming Interface (API):

API is the software application which allows different software to communicate with each other. Employers who have already logged on to Revenue (ROS) have this cert installed and API will use this. Each employer’s registration number has its own PREM – form of Revenue identification. Employers who operate two payrolls for the one company e.g. one for directors and one for staff will need to have two PREM’s which need access to two separate digital certificates.  

Payroll Submission Request (PSR):
A PSR will be used to submit payroll data to Revenue each pay period. This periodic file will need to be submitted to Revenue on or before each pay date. PSR’s eliminate the need for P30s, P35s, P45s and P46s. In addition, P60s will no longer be issued to employees after year-end. Instead, employees will be able to view and print their official certificate of earnings and deductions from Revenue (MyAccount).

Payment:
Every month, Revenue will issue a statement with payroll submission totals. Employers can either accept the statement as a monthly return or correct payroll data if the statement is incorrect. If an employer does not accept or edit the statement, Revenue will deem it to be accepted. There will be no change to payment arrangements with payment due dates remaining the same as they are at present.

Fines, Penalties & Revenue Interventions
At first, Revenue are likely to have a transition or grace period and be lenient when it comes to introducing penalties for non-compliance. However, we don’t expect this leniency to last too long. Any business that does not comply with PAYE Modernisation will be easily identified by Revenue and will face penalties. More information on penalties is expected to be confirmed in the coming months. Non-compliance will also increase the likelihood of Revenue interventions such as Audits or Aspect Queries.

If you need assistance in getting ready for PAYE Modernisation or would like some information on outsourcing your payroll needs email poconnell@quintas.ie and we will arrange for a member of the payroll team to contact you.