Gender Pay Gap Reporting
Under legislation that came into effect in April 2017, UK employers with more than 250 employees are required to publish and report specific figures about their gender pay gap. The Irish government has recently published a similar draft bill (view the proposed Irish gender pay gap bill here), which is expected to be enacted in the near future and will make gender pay gap reporting a requirement for certain Irish businesses. The bill is currently before Dáil Éireann (in the third stage) and the status, in addition to the history, of the proposed gender pay gap bill can be accessed via oireachtas.ie.
We outline below some key information and points of note that organisations should take into consideration in their preparation for this potential new business requirement.
“Gender Pay Gap” Definition
According to the European Institute for Gender Equality, gender pay gap “represents the difference between the average gross hourly earnings of female and male employees.” Source: eige.europa.eu.
What Is Ireland’s Gender Pay Gap & How Do We Compare With The EU?
Eurostat’s 2016 Gender Pay Gap Statistics Report notes that the gender pay gap in Ireland is 13.9%, which means that on average women get paid €86.10 for every €100 paid to their male counterparts. Although Ireland ranks 11th of 28 in the EU (europa.eu, 2016), and is below the average of 16.2%, it is still some way off the lowest EU gender pay gap which was recorded in Romania with an average of 5.2%.
Gender Pay Gap vs Equal Pay
The gender pay gap is the disparity between average earnings of men and women in an organisation while equal pay means that men and women performing the same role must receive the same rate of pay. If a majority of senior positions in an organisation are filled by men (or women), there will be a gender pay gap, even if the equal pay laws have not been broken.
What Is Gender Pay Gap Reporting?
Gender pay gap reporting is the obligation to publish detailed annual reports highlighting an organisation’s pay differences across a range of metrics.
What Is The Objective Of Mandatory Gender Pay Gap Reporting?
The objective of mandatory gender pay gap reporting is to highlight any discrepancies that may exist between the average pay of male and female employees across medium-large sized organisations. Ultimately, according to the Department of Justice and Equality, the goal is to remove the barriers which prevent the advancement of full socio-economic equality for women.
Who Does The Gender Pay Gap Legislation Affect?
Initially, the proposed legislation will affect companies that have 250+ employees, although the government plans to eventually extend the obligation to organisations with 50+ employees.
When Will The Legislation Come into Effect?
A date has not yet been set, which should provide employers the opportunity to take steps to address requirements before reporting becomes mandatory.
What Information Will Likely Be Required In Your Gender Pay Gap Report?
Under the draft legislation, gender pay gap reports will have to include a wide range of statistics. When looked at in conjunction with the UK’s gender pay reporting requirements, it is likely that employers will have to report on the gender differences in:
- Gross hourly pay;
- Bonus payments;
- Part-time / temporary contracts;
- Benefits in kind; and
- Employees across four quartiles.
What To Do With Your Completed Gender Pay Gap Report
Similar to the UK, it is likely that completed gender pay reports will be required to be published on the company’s website and uploaded via an online portal, the exact details of which are yet to be revealed.
Non-Compliance With Gender Pay Gap Reporting Requirements
It is expected that fines will be levied against firms that fail to comply with their reporting obligations. Reputational damage may also potentially serve as a deterrent to non-compliance.
Ensure Gender Pay Gap Compliance
At EisnerAmper Ireland, our dedicated team of outsourced payroll professionals possess the tools and the expertise to analyse your payroll data and produce detailed reports highlighting the current gender pay gap in your organisation. From this, we can highlight key areas to address, which will allow your HR function to develop a strategy to address any imbalances and make year on year improvements in your gender pay gap report.
Learn more about our outsourced payroll services here.
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.”
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.
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.Latest News →
SARP for Employers
What is SARP relief?
SARP (Special Assignee Relief Programme) is an Income Tax relief available to certain individuals who have been assigned by a relevant employer to work in Ireland, either for that employer or an associated company of that employer. The relief can be claimed for five consecutive tax years and is currently available to qualifying employees arriving in the years up to, and including, 2020. The aim of SARP relief is to encourage multinational employers to redeploy talented employees into key positions within Ireland.
SARP conditions of qualification – what employers need to know
SARP can be claimed by employees who meet the following criteria:
- The employee must have worked for their relevant employer outside of Ireland for the six months immediately prior to being employed here;
- They must be contracted to work in Ireland for a minimum period of 12 months from the date they are first assigned here;
- They must not have been tax resident in Ireland for the five years immediately prior to being assigned here;
- They must be tax resident in Ireland for all of the years in which they claim SARP relief; and
- Their basic salary must be a minimum of €75,000 per year.
It is important to note that employees who avail of SARP cannot claim any of the following:
- Foreign Earnings Deduction;
- Cross Border Relief; and
- Research & Development Relief.
SARP for employers – how to calculate SARP
Under SARP relief, 30% of all income* over a threshold of €75,000 is exempt from income tax. For example; an employee who is paid €175,000 will not pay income tax on €30,000 of that income (€175,000 – €75,000 x 30%). The marginal rate of income tax is 40%, so the value of the relief in this instance would be €12,000.
- The exemption can be spread proportionately across the year, so the threshold for a monthly paid employee is €6,250 per month.
- Expense reimbursements and any amounts contributed into pension schemes cannot be included in the calculations for SARP.
- The exemption is limited to income tax only, so USC and PRSI should be deducted as normal.
The cost of one return trip for the employee and his or her family to their home country can be claimed tax free from their employer, as well as up to €5,000 per child for Irish school fees.
SARP application – how to claim SARP
The employer must apply for SARP relief by completing a Form SARP 1A and submitting it to Revenue within 90 days of the employee’s arrival in the country. If more than one employee is claiming SARP, the employer must submit a separate Form SARP 1A for each employee.
Employer / employee SARP reporting
Employers are obliged to file a SARP Employer Return, containing the pay and tax details for each SARP employee, to Revenue by 23 February following the year end in which SARP was claimed.
SARP employees are considered ‘chargeable persons for self-assessment’ by Revenue, which means they must file a Form 11 (Income Tax Return) to Revenue by 31 October following the year in which SARP was claimed.
How EisnerAmper Ireland can help
At EisnerAmper Ireland, our dedicated team of outsourced payroll professionals possess the knowledge and experience required to assist employers claiming SARP relief for their staff. From the initial application process and the monthly calculations, right through to the filing of the employer return, we can provide expert advice and insight every step of the way.
Our income tax specialists are also on hand should your employees require any advice and assistance with their income tax filing obligations. Learn more about our outsourced payroll services here.
* From 1 January 2019 the government plan to introduce a ceiling of €1 million on eligible income.Latest News →