PAYE — Transition from 2019 to 2020

One year on from the introduction of Revenues new PAYE regime, employers need to ensure they are ready for the transition from 2019 to 2020.

Information recently released by Revenue shows that employers have made more than 6 million payroll submissions since the introduction of PAYE modernisation in January 2019. While most employers are getting to grips with the new system, the transition from 2019 to 2020 requires careful handling.

2020 Revenue Payroll Notifications

Employers who have not already done so should request RPNs for all employees before the first payroll run of 2020. If there is no RPN available for an employee, emergency tax must be applied.

Payments made in 2020

Payments paid on or after 1 January 2020 must be reported to Revenue when the payment is made, regardless of when the money was earned. Employers should use the tax credits and rate bands included on the 2020 RPN even if the payment refers to work carried out in 2019.

Payment dates

Payments must be reported to Revenue on or before the payment date and will be included in the monthly statement that Revenue issues summarising your payroll submission requests. Payment dates for 2019 and 2020 cannot be included in the same payroll submission.

Employment Detail Summary

Employers no longer need to provide P60s for their employees. Instead, employees can now access details of their pay and statutory deductions via the ‘myAccount’ service on the Revenue website.

Employees who have left

If you are making a payment in 2020 to an employee who ceased employment in 2019, you will need to submit a new RPN request and make a payroll submission for the post-cessation payment.

‘Week 53’

As 2020 is a leap year, this may create ‘Week 53’ payroll issues for some employers if it results in an additional pay day for employees (including pensioners) who are paid on a weekly, fortnightly or 4-weekly basis. Employees who are paid on a monthly basis are not affected. If you need information or assistance about the potential impact of ’Week 53’ on Income Tax and USC deductions, please contact a member of our team.

Fines and penalties

As in all matters involving Revenue, timeliness and accurate record-keeping is vital when processing PAYE. Bear in mind that your payroll submissions and corrections feed into Revenue’s risk analysis system and that if you are selected for a compliance visit, your PAYE processes will be checked. There is a fixed penalty of €4,000 for each breach of the PAYE rules. Further information is available on the Revenue website. If you have concerns or need assistance, please get in touch.

PAYE Employee – What to do now?

Employees will not receive a P60 from employers for 2019 or subsequent years.

Instead, from 1 January 2020, you will access your Employment Detail Summary on through ‘myAccount’.  This summary will contain your pay and statutory deductions for the year as reported by your employer or pension provider.  To claim additional tax credits, reliefs or expenses, PAYE customers must complete an Income Tax Return.  The quickest and easiest way to complete the Return is through PAYE services in ‘myAccount’.