PAYE Modernisation…What Has It Got To Do With Me?
The Pay As You Earn (PAYE) system was introduced in 1960. Since then there has been little change, so much so that many agree the current system is well behind the times and certainly hasn’t embraced technological advances. But what has this got to do with you?
“PAYE Modernisation” are the big buzz words of the moment, and will impact all those who work with, and get paid through payroll.
Tara Higgins, Senior Associate, with our Cork team, specialises in working with AP/AR/Payroll/Credit Control and part qualified accounting professionals. Tara prepared this article to give you a brief insight into what it’s all about and what your payroll team, or company, are dealing with right now.
What Is It?
The purpose the PAYE Modernisation project is to modernise the pay as you earn (PAYE) system to deliver real time reporting (RTR) in relation to payroll.
It will essentially change how employers and employees interact with Revenue, when it comes to pay and tax.
Following the official launch of the project on 1st January 2019, employers will be obliged to report, pay tax and other deductions to Revenue as they run their payroll.
In a nutshell….
- It’s about filing returns to Revenue in real time.
- It will see us waving goodbye to the P45, P30, P35, and the P60.
- When employees want any information on their pay, and or taxes, they will simply log in to ‘my Account’ at www.revenue.ie, and view or print out the information needed.
- P2C will now be called Revenue Payroll Notification (RPN) .
- Payroll teams and companies will need to process payroll and send the Payroll Submission Request (PSR) to Revenue each time an employee is paid, at every pay period.
- Employee pay and taxes will need to be reported to Revenue on or before pay day.
- Any changes or adjustments required to correct payment errors will need to be made in the following pay period.
- Amendments to prior periods should only arise to correct exceptional issues.
- To ensure employees are not placed on Emergency Tax they will need to register on Revenue’s ‘myAccount’ to ensure accurate RPN details are available to their employer.
What Should Have Happened By Now?
By now your employer, more than likely via your payroll team or company, will have (hopefully) submitted a list of current active employees. Revenue required this to be done by 31stOctober 2018. Just so you’re clear “current active employees” are anyone who hasn’t been issued with a P45. “Current active employees” also includes anyone on long term leave, on a career break, seasonal workers and temporary employees.
What Happens if We Don’t Play Ball?
For those in breach, or not compliant, penalties will apply. So it’s essential that everyone is up to speed with what’s going on, and what the change means for them. To help people get to grips with it all Revenue has developed and issued a range of great resources for employers and employees, all of which are available at www.revenue.ie/payemodernisation.
“Change is inevitable – except from a vending machine.” – Robert C Gallagher
As with all change there is a period of confusion, uncertainty and nervousness. There is no doubt that over the first few months, post the introduction of PAYE Modernisation, there will be extra work generated for those involved in payroll. So keep this in mind and show a little kindness to your payroll team or company.
However this is a good change. PAYE Modernisation will finally bring payroll into the 21st century. It will make it easier for employees to access real time information about their pay and taxes. It will reduce the margin of error and the need for adjustments at year end. And overall will save us all a lot of time and hassle.
“PAYE Modernisation…What Has It Got To Do With Me?……brought to you by Barden.
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