In what has been labelled the most significant reform of payroll operations in over 50 years, Revenue Ireland is seeking to streamline and modernise the Pay As You Earn (PAYE) system. The UK has already implemented a similar system called Real Time Information, while Australia will soon move to a Single Touch Payroll standard
From 1 January 2019, employers will be required to report pay, tax and other deductions to Revenue every payroll run as part of the new system, labelled PAYE Modernisation.
Through this real-time reporting process, Revenue aims to ensure all stakeholders "will have the most accurate, up to date information relating to pay and tax deductions," as well as significantly reduce the administrative burden placed on employers, particularly through the elimination of forms P30, P35, P45s, P46s and P60s.
PAYE Modernisation will see employees benefit too from real-time visibility of pay information online. Periodic reconciliations throughout the year will also provide certainty employees are only being taxed based on their circumstances, reducing instances of tax over or underpayments at the end of the year.
As PAYE Modernisation will be facilitated through compliant payroll software solutions, small businesses who manually manage their payroll duties may see potential difficulty meeting their obligations.
We recommend any Sybiz customers not using a PAYE Modernisation compliant payroll solution speak with their accounting or business management software provider for further advice.