At the best of times, payroll is a complicated and time-consuming process. Furthermore, with the new PAYE Modernisation system, it's clear to see why many companies are concerned about the shift, which began on January 1, 2019. In fact, now is the best time to think about Payroll Outsourcing to ensure that your business is in compliance with the new PAYE system. PAYE Modernisation is a "real-time" payroll reporting (RTR) system that represents the biggest shift in payroll processing since the 1960s.

Real Time Reporting:

Employers must send their employees' PAYE tax and deductions to Irish Revenue in real time from January 1st, 2019. (RTR). Real-time reporting effectively means that reports must be submitted before employees are paid each pay period. Employers will also have to record information of any employees who leave their jobs when they submit their payroll to Revenue under the new system. Employees now have real-time access to the payroll data that their company submits to Revenue. Similarly, Revenue has complete data on each employee during each payroll cycle.

PAYE Online

The entire payroll process and connection with Revenue is now conducted online, with all payrolls being automatically reported to Revenue, who will have real-time information on each employee's earnings from all jobs. As a result, the rationale for companies calculating and reporting their employees' pay and deductions as they are paid is that it will make it easier to deduct and pay the proper amounts of taxes, such as income tax, USC, and PRSI, at the appropriate times.

The impact of new PAYE System on Employers

• PAYE Modernisation will involve an “Employer Submission” to Revenue each time an employee is paid. The Employer Submission will contain information similar to that which currently appears on an employer’s P35 return.
• P30s, P35s and P45s have been abolished with employers submitting this information to Revenue electronically in the aforementioned Employer Submission. 
• Generation of P60s has also been abolished.
  

What impact has the new system had on the present PAYE system?

Employers must deduct Income Tax, Pay Related Social Insurance (PRSI), Universal Social Charge (USC), and Local Property Tax (LPT) from an employee's gross pay under the existing PAYE tax system in Ireland. Each employer must supply a list of all their employees via ROS prior to the start of the new system, as well as guarantee that every employee is on the current P2C list. In a nutshell, the PAYE Modernisation system has altered the way employers handle PAYE information and send it to Revenue in order to improve firms' PAYE reporting requirements to Revenue.

Contact us today to find out how our outsourced payroll solutions can benefit your company