15/02/2019 by John Bond 0 Comments
What Your Need to Know about PAYE Modernisation
We’ve been receiving a few questions recently about the PAYE Modernisation project undertaken by the revenue commission. In the interest of keeping our clients informed, below you will find some information about the most significant change to the PAYE system since its introduction in 1960.
Incredible as it may sound, the PAYE (PAY As You Earn) system was first introduced in the early sixties. More incredible still, is that the system has existed in more or less its original form since then. With this in mind, a modernisation of the PAYE system is long overdue.
So what’s new?
From a legislation point of view, the major change is that employers have to report their employees' pay and PAYE deductions, in real time, every pay period.
What this amounts to is that previous employer reporting obligations like the submitting of P30s, P45s, P46s, etc. have now been abolished.
This change is designed to make it easier to deduct the correct amounts of:
- Pay Related Social Insurance
- Income Tax
- Universal Social Charge
- Local Property Tax
How does this change effect my payroll system?
The major innovation from a payroll point of view is that the PAYE modernisation is now compatible with most payroll systems. Popular Payroll software like Collsoft, Brightpay and Big Red Book are fully compatible with the PAYE Modernisation making real-time reporting completely seamless.
Employers should find reporting their employee PAYE deducts easier than ever.
What if I don’t use Payroll software?
For businesses that still manually handle their payroll, revenue accepts this change will be an added burden on these employers. Also, it’s important to be aware that with the necessity to report pay deductions in real time every pay period, will increase the possibility of human error and therefore the risk of perceived non-compliance will also increase.
If you are an employer currently handling your payroll manually, it may be time to consider upgrading to the various payroll software solutions out there.