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PAYE Modernisation

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What is PAYE modernisation?

PAYE modernisation is a fundamental change to the current system of reporting PAYE deductions to Revenue and represents the most significant update to the PAYE system since its inception in 1960.  The new regime is designed to meet the demands of today’s workforce by utilising modern communication technologies to enable “real time” reporting of employee’s payroll data.  Traditional payroll returns, such as the P30, P46 and P35 will become obsolete, as will paper forms of P45 and P60.

The objective of PAYE modernisation

“The objective of PAYE Modernisation is that Revenue, employers and employees will have the most accurate, up to date information relating to pay and tax deductions. This will ensure that the right tax deduction is made at the right time from the right employees, and that employers pay over the correct tax deduction and contribution for every employee. This will improve the accuracy, ease of understanding, and transparency of the PAYE system for all stakeholders.”

(Source: – PAYE Modernisation – Report on Public Consultation Process.)

The benefits of PAYE modernisation

For employers, reporting pay, tax and other deductions in real time (i.e. when the payroll is being processed) will alleviate the administrative burden associated with the processing of a payroll year-end.  Changes to employee’s tax credits and rate bands will be automated which will eliminate the possibility of deducting an incorrect amount of tax.

Employees will benefit from the ability to view accurate, up-to-date information relating to their PAYE deductions anytime via their online Revenue myAccount.  Real-time data will assist Revenue in ensuring that employees get the full benefit of their entitlements during the year, particularly where an individual has a number of employments.

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How employers & payroll personnel can prepare for PAYE modernisation

Employers, and those responsible for the provision of payroll services, should review their current practices in readiness for the upcoming changes.  As with all largescale changes, stakeholder engagement is key to ensuring that all those affected are aware of their evolving obligations. Payroll processes will need to be streamlined and a greater focus placed on quality, as the submission of payroll data must be made on, or before, the employee’s pay date.

New requirements arising from PAYE modernisation

The main requirements to ensure a frictionless transition include:

  • Payroll software must be compliant with the new system;
  • Employees will need to register for a Revenue myAccount to manage their tax affairs; and
  • An accurate list of employees must be uploaded to Revenue via ROS.

How EisnerAmper Ireland can help

At EisnerAmper Ireland, our dedicated team of outsourced payroll professionals possess the tools and the expertise to process your payroll accurately and efficiently.  We utilise market leading software to ensure compliance and our staff are highly trained and fully prepared to meet the challenges that PAYE modernisation may bring.

Learn more about our outsourced payroll services here.

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