If you employ staff in Ireland you are obliged to deduct employment taxes which must be reported and paid to Revenue under the PAYE system. Under Revenue’s programme of PAYE modernisation that came into effect 1 January 2019, payroll taxes must now be reported to Revenue on, or before, the date employees get paid. Essentially, having an effective payroll function set up and ready to go from day one is now more of a necessity for new employers in Ireland who wish to ensure compliance with current legislation.
The following are 5 key steps which must be taken ensure that your first pay run goes off without a hitch:
In step 2 we look at the tax registration process, however, before you can register your company as an employer with Irish Revenue it must first be incorporated and registered with the Irish Companies Registration Office (CRO) by filing a Form A1. A full list of the documents which must be submitted along with the A1 can be found on the CRO website.
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Some non-resident entities who wish to employ staff members to carry out duties in the state may not be required to register with the CRO, see “Step 2” for more information.
For most companies, registration for Employment Taxes (PREM) with Irish Revenue is carried out by completing a form TR2 which is returned to the regional Revenue Registration Unit relevant to your location. Tax advisors can complete the registration process on your behalf using an online form which can significantly reduce the processing time.
Non-resident entities who have no physical presence in Ireland can also obtain a PREM registration by completing a form TR2 (FT). There are, however, other tax considerations for non-resident companies with employees in Ireland that should be considered, such as Permanent Establishment for Corporation Tax – for more information contact our Tax specialists.
Information about your obligations when you become registered as an employer can be found here.
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You can set up and run a payroll in Ireland without having any prior knowledge of Irish employment law, however, it is definitely beneficial to become familiar with your obligations as an employer along with the basic rights of your employees. Some of the more common elements of employment law that will affect most, if not all, of your employees are as follows:
The Citizens Information website is a useful resource with further information – read “Employment rights and conditions” here.
For a new employer with previous experience of processing a payroll in Ireland, it may be helpful to review the latest legislation, purchase the relevant software and incur the associated administrative costs. Some companies, particularly larger operations, could opt to take on a payroll specialist in the first round of hires. For everyone else, a sensible and cost-effective option is to engage the services of outsourced payroll specialists to provide accurate calculations, meet statutory obligations and effectively manage one of the most critical functions of a fledgling business.
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Once calculated, your employment tax liability must be reported to Revenue on, or before, the date you make the payments to your staff. This liability is then due for payment to Revenue, in most instances by the 23rd day of the following month. It is still possible to manually make these payments via wire transfer, BACS, EFT etc., however, this process can be automated if your business has a *SEPA compliant bank account. The BIC and IBAN of your SEPA account is added to your Revenue On-line Service (ROS) profile to create a Debit Instruction which allows Revenue to deduct the funds on the appropriate date.
*Since 2010 every bank account opened in an EU member state is SEPA compliant.
At EisnerAmper Ireland, our dedicated team of professionals possess the knowledge and experience required to provide guidance and the intelligent solutions you need when setting up business in Ireland. As your business grows, we will tailor our offering to ensure your needs are met at every stage of your development.
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