With PAYE Modernisation coming to Ireland in January 2019, now is the perfect time to check that your payroll processes are fully compliant with PAYE requirements.
The new process will require businesses to report pay, tax and deductions to Revenue with every payroll run. As a result, there will be greater pressure to make sure the payroll is accurate first time, not least because Revenue has said it will be using the information received for its risk analysis. For some companies, annual reporting has masked payroll processes that are not compliant with PAYE regulations. Revenue said: “The real time reporting regime will make these visible and such processes will need to change.”
Here’s a 5 step process for cleaning up your data, so you’re ready for PAYE Modernisation.
Verify your employee data
Start by checking the quality of your employee data, including the first name, last name and address. Make sure that all personal details are current, complete and correct. Ask employees to tell you if they’ve moved since your records were updated, and carefully check for any typos or spelling mistakes in your data.
Link employees to your company
Check that you have linked all employees to your employment. You need to submit a P46 form to Revenue for any employees that are not yet linked. The forms can be submitted through the Revenue Online Service (ROS) under the ‘My Services’ tab. Select Complete a Form Online, select the tax type as PAYE-Emp, and select the type as New Employee. Select to file a P46, and complete the form details.
Check your Tax Credit Certificates (P2C)
Linking employees to your company enables Revenue to provide tax credit certificates (P2C) to you for them, so you know how much tax and Universal Social Charge (USC) to deduct from your employees’ pay. When you receive the certificates, check them against your records to ensure you are making the correct deductions for each employee.
Check PPS Numbers
Revenue uses PPS numbers to manage tax allowances, access to public services and benefits. Check that each employee’s PPS Number is correct to ensure they receive all their entitlements. If you have employees who don’t have a PPS number, they can obtain one from the Department of Social Protection (DSP). Registrations must be made in person, but appointments can be made online, usually for the next day. The PPS number is usually issued the following day.
Update your software
Although PAYE Modernisation requires more frequent reporting to Revenue, this is expected to be an automated process, enabled by your payroll software. Revenue is working with software developers on the reporting process now. Check that your software provider will be supporting PAYE Modernisation and look out for software updates to support these changes.
In the next blog in this series, we’ll tell you more about the timeline for PAYE Modernisation.