PAYE Modernisation

From the 1st January 2019 the Revenue Commissioners introduced PAYE Modernisation, the objective of which was to improve the accuracy of the payroll information available to the Revenue, Employers and Employees, so that the right amounts of Income Tax, Pay-Related Social Insurance (PRSI), Universal Social Charge (USC) and Local Property Tax (LPT) were deducted at the right time for the right employees.  

Under the new system a Revenue Payroll Notification (RPN) is issued to the employer for each employee (previously known as a P2C) which states the Income tax Cut off and Tax Credits, the USC rates and any LPT that is to be deducted. This web service now permits employers to obtain the RPN for employees who were not yet registered as employees and will set up a new employment for the employee.  

The employer must then report the payroll information to the Revenue on or before the date the payments are made to the employees. The reports can be made from the payroll software or completed on Revenue Online System (ROS).  

However, if you are exempt from having to pay and file electronically then customised stationery would be provided to allow you to file submissions and make returns.    

The payroll submission must at least include the; 

  1. Amount of pay 
  1. Payment date 
  1. Amount of Income Tax, PRSI, USC and LPT deducted 

If using payroll software to make the payroll submission, upon receipt of the information the web service will either acknowledge the submission or reject the submission and provide the details of the errors.   

The Revenue may apply penalties of up to €4,000 per episode of non-compliance under the new PAYE Modernisation system  and subsequent revisions of submissions to Revenue as a result of errors or late adjustments may result in increased Revenue scrutiny and or formal inspection by them.