Manually Calculating Payroll
A significant number of small employers are still processing their payroll using a manual or spreadsheet system. A manual approach may seem like an attractive option but can result in inaccurate payroll processing. Payroll calculations are complex and change regularly, therefore, it is important that the payroll information is correct for your business, employee and Revenue records.
Up until now, a significant number of Irish employers have manually processed their payroll on a yearly submission basis. To date, this has been an adequate way to send your payroll information through to Revenue. However, this method will change with the introduction of PAYE Modernisation
in January 2019. Employers will no longer be able to submit their payroll information on a yearly basis. Instead, employers will need to calculate and report their employees’ pay and deductions as they are being paid in real time
Many business owners believe that a manual payroll system is a relatively easy way to manage their payroll and can seem like the most cost-effective option. However, a manual system does not have built-in processes to catch mistakes or notify you of payroll changes. Additionally, manual records are very difficult to maintain, store securely under GDPR and are subject to greater human error.
Manually Calculating PAYE Modernisation
With the introduction of PAYE Modernisation, the payroll process will be time consuming, frustrating and costly where businesses use a manual process. PAYE Modernisation is the biggest change to affect PAYE processing since it’s conception. The objective of the new system is to improve the way in which businesses, employees and Revenue communicate with each other. PAYE Modernisation will affect every employer and employee.
Under the new legislation, employers must submit their payroll information electronically to Revenue each payroll run. PAYE Modernisation
will replace the current outdated PAYE system and introduce a modern way of reporting your payroll information to Revenue. Employers will be required to report pay, taxes deducted and other PAYE information for each employee, every pay period to Revenue. This process will eliminate the P35 report submission option at the end of the payroll year. Additionally the traditional reporting forms that businesses use will be redundant, such as the P30, P35, P45 and P46.
PAYE Modernisation will not change the way businesses calculate their PAYE information, it will change how and when it is sent through to Revenue. Employers will submit their payroll returns electronically and in real time, each payroll run, allowing Revenue to access the most up-to-date information. Read: PAYE Modernisation checklist to ensure 100% compliance
Limitations of manually preparing for PAYE Modernisation include:
- No facility for directly submitting PAYE reports and information to Revenue.
- Payroll processing manually takes up valuable business time.
- The more manual the calculation, the more open to errors.
- Errors can prove difficult and time-consuming to locate.
- Manual miscalculations may result in penalties from Revenue.
- Employees will not receive a payslip every pay period which is a mandatory requirement by law.
Advantages of using Payroll Software for PAYE Modernisation include:
- Submit PAYE information electronically, with just a few clicks, straight through to Revenue each pay period.
- Retrieve tax credits and cut offs automatically.
- Increased accuracy and automation.
- Easily pay employees and keep up-to-date with the latest legislation.
- Comply with payroll tax and record-keeping laws.
- Complete payroll and PAYE Modernisation submissions in a timely basis.
- Large number of employees will no longer be a problem. Employees will receive a payslip detailing PAYE deductions and information each payroll period.
- Competitively priced software that is easy to use will result in time and cost savings.
How can BrightPay help? "The Revenue Commissioners recommends an integrated payroll and PAYE Modernisation solution for employers, as it will reduce the workload and administrative burden on the business significantly, whilst improving compliance."
Revenue have strongly advised employers and payroll processors to review their payroll processes and systems to ensure they meet the new PAYE Modernisation requirements for January 2019. Payroll software which caters for PAYE Modernisation will improve and streamline the payroll communication between employers and Revenue. This direct integration reduces the administrative burden by automating the submission of PAYE reports to Revenue and by automating the retrieval of tax credit instructions from Revenue.
BrightPay will easily cater for the requirements of PAYE Modernisation. We have worked and will continue to work directly with Revenue to ensure our payroll software is fully PAYE Modernisation compatible. BrightPay will streamline PAYE Modernisation
allowing users to instantly submit their PAYE data to Revenue with just a few clicks. Our payroll software is fully recognised by Revenue and will comply with the new payroll legislation in January 2019. Make sure you are ready for PAYE Modernisation by choosing BrightPay to streamline the PAYE process. Book a demo to find out how seamless PAYE Modernisation can be with BrightPay.
Free PAYE Modernisation Training Webinars
At BrightPay, we are committed to helping businesses understand how the upcoming PAYE changes will impact them. Our upcoming FREE webinars will give you an overview of how PAYE Modernisation will affect your payroll processing and how to get your business and payroll processes ready. Our PAYE Modernisation webinars are completely free to attend and include a presentation from Sinead Sweeney, the PAYE Modernisation Change Manager at the Revenue Commissioners. See all events here