In the next few weeks, as we approach the year end, one of the most common questions for our support team is 'do I have a week 53'? A week 53 occurs when a pay day falls on 31st December or, in a leap year, on 30th or 31st December.
For 2017, unless your actual pay date is 31st December which falls on a Sunday, you should not be processing a week 53. If you do not pay employees on a Sunday your payroll will finish on week 52 and the next week due to be processed will be week 1 in the 2018 software. If for example, you pay your staff on Fridays, week 51 will be 22nd December, week 52 will be 29th December and that will complete the payroll for the tax year 2017. The next pay date will be Friday 5th January which is in the tax year 2018.
If the pay that would naturally fall due in the first week in January has to be paid in 2017 due to business closure, bank holiday etc it should still be processed as week 1 of 2018 to keep in line with Revenue's PAYE calendar. In this situation, the payment date can be changed to a 2017 date on the bank payment file in the 2018 software to ensure the payment is processed on time.
Many businesses close down before Christmas and do not reopen until the New Year, bank payment files can be uploaded in advance without anybody having to be in the office. Week 53 should only be used in 2017 if the normal pay date is Sunday 31st December.
An error a lot of employers make is when they are paying employees for two and three weeks together at the end of the year and although the software will allow them to use the week 53 facility only two of the three weeks should be processed in the current year's software. The third week should be processed on the new software on its own and the bank file can be changed to whatever date the employer would like the employees paid.
Friday pay date - To simplify things lets go back to the Friday pay date again. I am going on my Christmas holidays on Friday 22nd December and I want to process the payroll until I get back which will be Monday 8th January. I can process the last two weeks together i.e. pay dates 22nd and 29th December on the 2017 software and I can create a bank file. The 2018 software should be installed and the payroll normally due on the 5th January processed as week one. Once updated, the pay date on the bank payments file can be changed to any date in December or it can be left as 5th January at the employer's discretion.
As the long dark evenings set in and Halloween is over, the build up to the most wonderful time of the year will begin again! At this time of the year a significant amount of employers pay-out a Christmas/annual bonus and no matter how little or large the bonus is, a large portion ends up being paid over to the Revenue if it is put through the payroll as a taxable addition.
For example, if an employee’s salary is €35,000 per annum and they receive a bonus of €1,000 at Christmas, this employee would only receive around half of this amount after tax, employee PRSI and USC. The company would also be liable to pay 10.75% employer PRSI on the bonus, so in addition to giving the bonus of €1,000 there is also the extra €107.50 meaning the bonus is in fact costing the company €1,107.50.
Revenue allow one small non-cash benefit per employee per annum up to the value of €500, PAYE, PRSI OR USC do not need to be applied to the benefit. A gift card or voucher seems to be the most popular way of allowing this payment to be made to the employee. The most popular gift card would seem to be One4All gift cards. Thesaurus Payroll Manager offers unique integration with One4All allowing employers to purchase gift cards quickly and easily for their employees. The integration offers a range of benefits, including:
Please note, where a benefit exceeds €500 in value, the entire amount will be subject to PAYE, PRSI and USC.
Purchasing gift cards through Thesaurus Payroll Manager is both simple and straightforward. To order, simply click on the Gift Card option at the top right hand side of the screen, fill in your company details, select the amount for each employee's gift card and click to proceed to the gift card website. The software will bring you to the gift card website where you will arrange payment and delivery details.
It is also possible to order Me2You gift cards through Thesaurus Payroll Manager, if required tick to order from Me2You.
For further details, click here.
A last ditch effort is being made by revenue to allow people to volunteer to pay their Local Property Tax and their outstanding Household charge before contacting employers and Pension providers to take the deductions at source!
The Office of the Revenue Commissioners has told more than 50,000 property owners that they will begin telling employers and pension providers to deduct the Local Property Tax from non-payers at source unless it is paid within seven days. In a statement, Revenue said the returns had to be filed online within one week.
It looks like there is no hiding place as Self-employed homeowners who fail to register have been warned they will be blocked from receiving a tax compliance certificate until they comply and pay. This in effect would mean some self employed people may not be able to work, take for example a taxi driver who is required to have a tax compliance Cert before A PSV licence will be issued .
Where the Household Charge for 2012 has not been paid or has been part paid by 1 July 2013 the arrears amount (including late payment penalties) will be increased to €200 and will be included as part of the LPT liability in respect of the property. In effect, the arrears of the Household Charge becomes an LPT charge and will be collected by Revenue. Unfortunately for people who did not pay their household charge a flat fee of €200 is now due along with the Property Tax Charge which will be deducted in the coming weeks at a time that people are already finding it difficult with extra costs as children return to school, college and the extra cost of the summer holidays in general . It's a hard one to call but looks like we will have no choice in the matter !
Maternity Benefit is taxable in Ireland since 1st July 2013, but remains exempt from PRSI and USC. Adoptive Benefit and Health and Safety Benefit are also taxable since 1st July 2013.
Revenue has advised that the employee’s tax credit certificate (P2C) will issue on the Week 1 basis when Revenue receives details of the payments from the DSP.
However it would seem that in some situations P2Cs have issued incorrectly on the cumulative basis. Employers should check before importing P2Cs from ROS to ensure that this does not occur. The impact from an employees point of view is that they would possibly end up owing money to revenue as the credits and SCOP would be lower that the original amounts put in at the beginning of the tax year and because the cert has been issued on a cumulative cert it would look for the extra tax as soon as the employee is due payment again . Its bad enough that women have to pay tax on their maternity payment without ending up with a tax bill in error aswell !
Mothers and pregnant women face losses of up to nearly €3,000 a year as part of the tax on maternity benefit which came into force on July 1st.
Women’s representatives said the measure was a mean-spirited move by the Government.
The tax will contribute €15m to the exchequer in 2013, and €40m per full year from then on.
But the National Women’s Council yesterday expressed concern that many women were not aware when the reductions in benefit would take affect.
Its policy advisor Ann Irwin explained: “It’s a very mean-spirited move in a lot of ways. Even the commission on taxation has said that maternity benefit should remain outside the tax net. It’s there for mothers to nurture children when outside the workforce.
“The benefit payments are an important acknowledgment for mothers of the cost of having a baby in Ireland.”
Opposition parties have branded the new tax measure as “anti-family” and it could see working mothers pay up to €2,700. Mothers will pay different rates depending on their top-up payments from their employer as well as assessments on their means.
The tax could see benefits reduced by up to €103 a week, the council said.
The Department of Social Protection paid out €309m in maternity benefit payments in 2011.
Mothers get between €217.80 and €260 a week in payments for 26 weeks.
The council said women who got employer top-up payments would be worst affected but that it remained unknown how many would be affected by the levy.
But ministers have insisted women overall will not be worse off. Some had been receiving high payments while on maternity leave, ministers have also said.
However, Ms Irwin said many women remained in the dark about the tax. “The first they may know about it while on leave is when their next pay package comes in.”