Jun 2019


PAYE Modernisation: The good, the bad and the ugly

Latest Revenue figures for PAYE Modernisation show that 161,000 employers have successfully submitted over 2 million payroll submissions in respect of over 2.6 million employees.

Although the new system has proved very successful overall, the first four months of the new real time payroll reporting system also faced some recurring issues with payroll submissions. Here are the 10 most common errors seen by Revenue:

  1. Employers mistakenly sending the payroll data to Revenue more than once.
  2. Employers incorrectly creating duplicate employments for the same employee.
  3. Payroll submissions, or parts of payroll submissions, failing the validation process.
  4. Employers ceasing employment for employees in error by incorrectly including cessation dates in payroll submissions.
  5. Employers failing to apply the most up-to-date Revenue Payroll Notification (RPN) when running payroll.
  6. Employees being taxed on the emergency tax basis where an RPN is available.
  7. Incorrect operation of emergency tax e.g. employee reported with emergency tax, but no tax deducted by the employer.
  8. ‘Gross Pay’ shown as less than ‘Pay for Income Tax’ and/or ‘Pay for USC’.
  9. No USC deducted where the employee is not USC exempt, and similarly, USC deducted where the employee is USC exempt.
  10. Employers paying their tax liability twice in error e.g. by setting up both a ROS Debit Instruction and Variable Direct Debit for the same payment period.

Where errors arise, employers should immediately rectify them to ensure that they are not included in future payrolls. Early action also reduces the possibility of a Revenue intervention. Revenue will continue to assist any employer who is experiencing genuine difficulty in complying with the new PAYE requirements. However, it is important to remember that employers who fail to engage with Revenue or who persistently breach the PAYE Regulations are liable to a €4,000 penalty per offence.

It is in every employer’s interest to ensure that the data submitted to Revenue is accurate and in line with the employee’s payslip record, especially now that employees have access to their pay and tax details through their myAccount. Any discrepancies between payroll details on an employee’s payslip and those reported to Revenue could result in employees seeking clarification from their employer.

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Posted byRachel HynesinPAYE Modernisation