Payroll
Employer Payroll Obligations in Ireland: PAYE Modernisation
TL;DR
Under PAYE Modernisation, employers must report pay, tax, and PRSI to Revenue in real time every pay run, give employees a payslip each period, deduct PAYE, USC, and PRSI, account for Benefit-in-Kind, and pay over deductions monthly. The old annual P35 is gone.
What is PAYE Modernisation?
PAYE Modernisation, live since 2019, is Revenue's real-time reporting system. Every time you pay staff, you must report their pay and deductions to Revenue on or before the payment date, rather than once a year. Source: revenue.ie.
Your core payroll duties
As an employer in Ireland you must:
- Report each payroll run to Revenue in real time, before staff are paid
- Deduct PAYE, USC, and PRSI at the correct rates
- Give every employee a payslip each pay period
- Account for Benefit-in-Kind on cars, health insurance, and other perks
- Pay deductions to Revenue monthly, or quarterly for smaller employers
Benefit-in-Kind
Perks such as company cars, health insurance, and certain expenses are taxable as Benefit-in-Kind and must be put through payroll in real time. The car rules link the charge to emissions and business mileage, which catches many employers out.
What happened to the P35 and P60?
Real-time reporting replaced the annual P35, so there is no year-end return to file. The P60 is also gone, replaced by the Employment Detail Summary, which employees access themselves through Revenue's myAccount.
Getting it wrong is costly
Late or incorrect submissions can bring penalties and interest, and they upset staff, who rely on accurate payslips. For a busy owner, payroll is the kind of recurring, deadline-driven task that is best handed to someone who does it every week.
Would you rather we just handled it?
Our payroll service, on a fixed fee.
Payroll
Frequently asked questions
What is PAYE Modernisation?
It is Revenue's real-time payroll reporting system, live since 2019. Employers report pay, tax, USC, and PRSI every time staff are paid, rather than annually. It replaced the old P35 year-end return. Source: revenue.ie.
What are an employer's payroll obligations in Ireland?
Report each pay run in real time, deduct PAYE, USC, and PRSI, issue payslips, account for Benefit-in-Kind, and pay deductions to Revenue monthly or quarterly. Accurate, on-time reporting is the core duty.
Do I still need to file a P35?
No. Real-time reporting replaced the annual P35. Your final payroll submission of the year completes your reporting, and employees get an Employment Detail Summary instead of a P60.
How is Benefit-in-Kind handled in payroll?
Taxable perks like company cars and health insurance are reported through payroll in real time. Company car BIK is based on emissions and business mileage, so it needs to be calculated carefully each period.
How often do I pay payroll taxes to Revenue?
Most employers pay monthly, by the 23rd of the following month on ROS. Smaller employers may be allowed to pay quarterly. The reporting itself happens in real time with every pay run.