Are you Ready? – The PAYE Modernisation is the new real-time payroll reporting system

Revenue is introducing a new PAYE system for employers from 1 January 2019. It will bring big changes to how employers gather and report information on payroll to Revenue. All employers need to be aware of how it works. All employers are obliged to comply with and operate the new regime from 1 January 2019.


PAYE Modernisation will change how employers report their payroll information to Revenue. Every time an employee is paid a file will need to be submitted to Revenue, consisting of all details of employee payments, deductions and leaver information. The contents will be similar to the current annual P35, but this file will be submitted every pay period.

Listed below are the steps needed to ensure that employers report their payroll information to Revenue.

  • Each time you pay your employees (and directors), your software should automatically search for Revenue Payroll Notifications (RPNs), which will provide you with the details required to calculate the correct payroll deductions.
  • RPNs can change frequently depending on your employees’ circumstances. You can access the RPNs with your payroll software or on ROS.
  • The safety net of being able to use the P35 at the end of the year to correct errors will be gone. You will no longer be able to correct mistakes in this way. 
  • You can review Revenue’s monthly statement, which summarises your payroll reports. You can make corrections to this report before the 14th of the following month. After that, it becomes a statutory return.
  • In the past Revenue did not see payroll information until you reported it on the P35. Now Revenue will see details of employees’ pay and tax deductions in real time. 
  • This means that the employer must at all times operate the payroll accurately when the employee is being paid to avoid mistakes and possible penalties.

The above processes will replace the current P30 reporting, which was only required on a cumulative basis for the company rather than per employee. At the end of every month the employer will receive a statement from Revenue summarising the information they reported.
This will be available to review on ROS system on the 5th day of the following month. The employer can review Revenue’s monthly statement, which summarises your payroll reports. You can make corrections to this report before the 14th of every month. After that, it becomes a statutory return.
Employers need to review their payroll procedures now, so that they will be able to meet the new requirements (and to avoid penalties of €4,000 for each non-compliance under the new system).
For further information, please visit the Revenue website.

 

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