Tips and Considerations for Payroll Year End

By Anne Reilly, founder and CEO of PaycheckPlus

Payroll Year End is a particularly busy time for payroll professionals. With 2017 coming to an end, and given the multitude of upcoming developments that are/will affect Irish payrolls, I thought that I’d put together some tips and considerations to help you prepare for payroll year end.

Employer Tax Credit Certificates (P2Cs) 2018

2018 P2Cs are being / will be issued to employers for all of their employees advising thresholds and rates that are applicable from Jan 1^st 2018. Employers, where possible, should not run 2018 payrolls until they receive 2018 P2Cs – if 2018 P2Cs are not received on time to run your payroll then you should continue to use your 2017 P2Cs for tax deductions and contact Revenue.

Be careful not to, from a year of repetition, upload 2018 P2C data to your 2017 payroll.

New Hires in 2017

All employees must be registered with Revenue – keep in mind that if the employee does not register their job with Revenue then the employer must do so. So, if you didn’t receive a Form P45 from a new hire during the year, still haven’t received an employee’s P2C, etc., then consider reminding the employee to register their job with Revenue or do so on their behalf.

Taxation of Illness Benefit and Occupational Injury Benefit

Taxation of Illness Benefit and Occupational Injury Benefit will change from Jan 1^st 2018. Employers will no longer be required to include these payments with taxable pay as Revenue will be making the necessary incorporations into the employee’s tax credit certificates. For more information, click here.

P35 Considerations

PPSN

As part of PAYE Modernisation, Revenue has been replacing a significant number of ‘W-number’ PPSNs (i.e. PPSNs that have “W” as the 2nd alpha character) with new distinct PPSNs. Pay particular attention to PPSNs on tax credit certificates (Revenue will highlight if there has been a PPSN update) and make the relevant payroll record changes where necessary, including when completing P35Ls.

Local Property Tax (LPT)

When / where instructed by Revenue, employers must ensure the correct deduction of LPT and its inclusion in P35Ls (with any updated PPSNs if necessary).

P35 and P60

Completing and filing P35s along with completing and issuing P60s can take up a significant amount of time for payroll professionals. To help ensure that you meet the mid-February deadlines you and your team should, as early as possible, schedule the workload and, where possible, arrange duties to facilitate meeting these employer obligations on time.

For Revenue’s P60 ‘cheatsheet’, click here.

For information on completing P35s, click here.

Universal Social Charge (USC)

The updated USC rates and thresholds will come in to effect Jan 1^st 2018. Briefly, the USC exemption threshold of €13,000 will remain unchanged. The 2.5% rate has dropped to 2%, the 5% rate is down to 4.75% and the 8% rate will not change. Also the surcharge rate of 3% for non-PAYE income over €100,000 will remain unchanged.

Budget 2018

BIK, Corporation Tax, VAT, Stamp Duty, Key Employee Engagement Programme (KEEP), National Training Fund Levy etc. are some of the many aspects of Budget 2018 that will affect employers. It’s imperative that HR, payroll teams, accountant’s etc. are compliant with these updates. Payroll personnel can familiarise themselves with the 2018 budget update here  and stay up to date regulatory changes.