What is PAYE Modernisation ?
On January 1st of 2019, the most significant changes to the Irish PAYE system since 1960 will come into effect, known as PAYE Modernisation. It means that employers will have to calculate and report the pay and deductions of all their staff in real time. It also means that employers will provide details of employees leaving the organisation as part of the normal payroll process. Ultimately it means that all the 'P' documents are essentially consigned to history. P2Cs, P35s, P60s, P30s and P45s will all be retired and replaced with an RPN - or its real name, a Revenue Payroll Notice.
PAYE Modernisation will allow Revenue, employers and employees to have the most accurate, up to date information relating to pay and tax deductions for all employees thereby guaranteeing that the right tax deduction is made at the right time from the right employees and that employers pay over the correct tax deductions and contributions for every employee. This will no doubt result in an improvement in the accuracy, ease of understanding and transparency of the PAYE system for all stakeholders.
Employees will have the certainty in the amounts payable to Revenue safe in the knowledge they have not over or underpaid tax. Through real-time reporting by the employer, Revenue will have up to date information to ensure that each employee is subject to the appropriate tax deduction. Payroll Software suppliers have been working with Revenue for quite some time creating functionality that will allow for direct interface to Revenue as part of the normal payroll run, resulting in a significant streamlining of business processes and a reduction in administrative burden and costs. Logging on to ROS and manually uploading files, like the P forms, will be consigned to history. It will all happen automatically as part of the payroll cycle.
How does it affect me ?
Employers will be required to report pay, tax deductions and any other deductions in respect of each employee every time they run their payroll, whether that be weekly, fortnightly, monthly etc., rather than annually via a P35. This reporting process will eliminate the need to file P30’s, P35’s, P45’s, P46’s & P60’s. It will no longer be possible for employers to submit their P35 payroll file through to Revenue at the end of the tax year. The final year for the P35 return is 2018 (which needs to be submitted by February 2019).
Payroll teams will need to focus on the quality and accuracy of the data they provide to Revenue on each pay run. They will calculate and deduct tax from employees’ pay and benefits based on the latest Revenue Payroll Notification (“RPN”) from Revenue. As part of the payroll process, they will request the most up to date RPN before making payment to that employee. Payroll teams will have to notify Revenue on or before the making of a payment to an employee in respect of each employee the amount of pay and benefits, date of payment and the taxes deductible (PAYE, USC, PRSI and LPT).
Each month, Revenue will issue a monthly statement detailing all “Payroll Submission Requests” made during the previous month. This monthly statement is deemed to be the correct employer monthly return if no action is taken. If the details are incorrect the employer must amend or correct the underlying payroll data prior to the 14th of the following month and resubmit.
What are Intelligo doing ?
Intelligo have been working on this project for the last twelve months. We have been working directly with Revenue at every stage of the project to ensure our payroll software is ready for 01 January 2019 and fully integrated with Revenue's systems.
In a nutshell, Megapay will 'talk' directly to Revenue's systems, removing the need for logging on to ROS and uploading/downloading files. Real time will mean for instance that if a new employee starts, you'll receive their RPN as soon as they are registered. If an employee leaves, Revenue will be instantly updated in the payroll period when they leave. Time consuming and manual processes such as enveloping and posting of P45s become redundant. Seamless integration between Megapay and Revenue translates to a frictionless process where the necessary inputs are received and returns submitted automatically as part of the normal Megapay payroll cycle.
Intelligo are running a number of customer education sessions. The sessions will provide an overview of the changes and how these changes affect Megapay and your payroll process. At this session users will see PAYE Modernisation in action from within Megapay. These sessions will be held in Cork at Rochestown Park Hotel on November 15th and Citywest Hotel, Dublin on November 22nd and 23rd. Highly recommended for Payroll Staff & Managers, Technical staff that provide IT support to Payroll, Finance Managers who oversee the Payroll Function and all other users of the Megapay software.
To view the agenda and book your place, simply click here.
What should I do now ?
Revenue are requesting a ‘List of Employees’ be sent to them before 31 October 2018. The purpose of this is so that Revenue have the most up to date list of your current employees before they issue the new RPNs for 2019. You can generate this list in Megapay and submit it via ROS.
PAYE Modernisation represents significant changes to payroll operations for every employer. As a consequence, Revenue are hosting free regional seminars for employers and tax agents from September 2018. These seminars will explain how to comply with the new reporting requirements; how to prepare for PAYE modernisation; the benefits of PAYE modernisation for employers and employees and updates to Revenue Online System (ROS) for PAYE modernisation. We would encourage all clients to attend once of these seminars
PAYE Modernisation Checklist
[ ] Read information from Revenue on PAYE Modernisation
[ ] Communicate with your employees - encourage them to register for MyAccount
[ ] Attend one of the Revenue Seminars
[ ] Ensure you have a correct PPS Number for every employee
[ ] Check that you have issued a P45 for every employee who has left
[ ] Make sure that you have a Tax Cert for all current employees
[ ] Submit your List of Employees to Revenue by 31 Oct 2018
[ ] Book your place on a Megapay Education Session