The Irish PAYE system was first implemented back in 1960 with no major changes since its introduction. Ireland today is very different compared to what it was 58 years ago - so why should the PAYE system remain the same?
For the past few years, Revenue has been working on a much needed and well overdue facelift of the Irish PAYE system. The new system, known as PAYE Modernisation will replace existing PAYE processes from 1st January 2019. Many employers are left wondering what the difference is between the two systems, and more importantly, which system is really better?
With PAYE Modernisation, there will be no P30s every month or quarter and no P35s at the end of the tax year. In fact, all ‘P forms’ will be eliminated.
Instead, submissions will need to be sent to Revenue in real time, detailing employee pay and tax information. These will be known as Payroll Submission Requests (PSR), and will need to be submitted ‘on or before’ the date an employee is paid each pay period. In most cases, this means a file will be submitted either weekly or monthly.
Some employers are worried that this will massively add to an employer’s workload. Realistically however, the payroll process will require much less of an employers time. Payroll software will be integrated with Revenue so that for employers, the file will be automatically prepared and sent directly to Revenue at the click of a button.
The retrieval of tax credits will also be automated, which should ensure that the correct credits are being applied by employers. With payroll software, Revenue integration will enable employers to receive changes to an employees tax credits directly from Revenue and update it in the payroll software at the click of a button. This file will be known as a Revenue Payroll Notification (RPN).
Regardless of how frequently an employer will be required to send submissions to Revenue, the payment date will remain the same. There will be no change to the method that employers currently use to make the Revenue payment.
Find out what else the new system has to offer with Thesaurus Software’s free online PAYE Modernisation webinars.
Although employers will still have the option to process their payroll manually, it will be very cumbersome and tedious, with the changes becoming more of a hindrance than beneficial.
Employers are advised to use PAYE Modernisation compliant payroll software so that the entire system will be smooth and integrated. With payroll software, employers will benefit from a reduced workload as a result of PAYE Modernisation, while making the payroll process much easier and streamlined.
Thesaurus Software is the number one payroll software provider in Ireland with two payroll packages to choose from - Thesaurus Payroll Manager and BrightPay.
Book a demo today to see how PAYE Modernisation will affect your business.