PAYE Modernisation Release 1: Authorisation Certificates

Over the past few months, we have been discussing PAYE Modernisation on our blog. The new functionality for PAYE Modernisation will be released in stages over the next 2 weeks. We are happy to announce the first release, which allows you to upload ROS Digital Certificates to SimplePay.

If you are unsure about obtaining these Digital Certificates, please refer to this guide provided by Revenue.

This is a very important process for PAYE Modernisation and all employers or agents (such as payroll bureaus or accounting firms) will need to do this before processing payslips in 2019. Without uploading these certificates, requesting RPNs from ROS and submitting payroll information to ROS is not possible.

To help you through this process, we have compiled a useful guide which can be downloaded here:

PAYE Modernisation Guide – Release 1

Please note that these guides are in PDF format and you will therefore need to have a PDF reader on your computer to view them.

We’ll be in touch again shortly with instructions on how to retrieve RPNs, which contain information on the cut-off points and tax credits of employees.

If you have any difficulties with this new process, please do not hesitate to contact our support team who will be happy to assist.

Revenue End of Year Notice

Revenue released an end of year notice which you should have received on Friday 23 November 2018. This end of year notice serves as a reminder of the PAYE Modernisation project and its consequences, as well as some additional information and reminders that Revenue wants you to be aware of. Here is a summary of the most important parts of the notice, most of which we have already discussed in previous blog posts:

  • No further P2Cs will be issued from 30 November 2018. These will be replaced by RPNs from 1 January 2019.
  • To ensure that you are ready for PAYE Modernisation, you must ensure that you:
    • have registered all of your employees with Revenue,
    • checked you have the correct Personal Public Service Number (PPSN) for all employees. Employers can use the PPS number checker in ROS to confirm the correct PPS number for employees or pensioners,
    • operate the Revenue deduction instructions for each employee (on the P2C up to end-2018 and on the RPN from January 2019),
    • have complete payroll data, which is accurate and up-to-date,
    • have all required information on employee pay, including notional pay, on a timely basis and in the correct format to payroll; and
    • have an active ROS digital certificate on the computer you use to run your payroll.
  • You should review your ROS digital certificates to ensure that they have not expired.
  • You should review your sub-users’ digital certificate permissions for appropriate permissions.
  • Forms P45, P46, P30, P35 and P60 will be abolished after the 2018 tax year.
  • Payment due dates to Revenue remain unchanged in 2019.
  • USC rates and thresholds will change with effect from 1 January  2019.
  • For the 2019 tax year, if an employee is expected to exceed the USC threshold but their RPN states that they are USC exempt, you should advise the employee to contact Revenue to have their RPN updated.
  • Rates for Emergency Tax and the legal basis for applying Emergency Tax will change effective 1 January 2019.
  • For the 2018 tax year, employers must ensure that the correct PPSNs as per the P2Cs are used for employees.
  • Revenue’s 1890 LoCall phone system has been replaced by standard telephone numbers.

A Sneak Peek at PAYE Modernisation Changes

As you’re aware by now, it will be mandatory for businesses across Ireland to start complying with PAYE Modernisation from January 2019. Under these new processes, there will be no change to the way that PAYE is calculated, only the way that this information is reported to Revenue. Being a client of SimplePay means that you do not have to face these changes alone. After extensive research, consultations with experts and developing our plan of action, the SimplePay team continue to work hard to ensure that you will be compliant.

So what kind of changes can you expect on the system? While there may still be some tweaks and changes after our final testing phase, here is a sneak peek of some of the functionality that we have been working on:

  • As part of employer authentication, each employer will be given a ROS digital certificate and a password by Revenue. A new ROS Authentication page will be available on SimplePay where you can upload your certificate and view its validity.

Please note: This will work slightly differently for payroll and accounting firms that manage payroll on behalf of multiple companies, as a single agent certificate can be used for all companies. More information on this will be provided in the future.

  • To avoid being taxed on an emergency basis, clients previously needed to upload a P2C for an employee. With PAYE Modernisation, a P2C is replaced by an RPN. This is generated by Revenue and can be retrieved with the click of a button from the usual tax information screen on SimplePay.

  • The SimplePay system will regularly update the RPN information for employees automatically. If the tax information for an employee has been updated before the regular automated RPN update has occurred, you can request the system to fetch RPN information from Revenue from the same tax information screen.

  • The P30 will be replaced with regular online submissions for each pay period. This will still be done from the Filing section in SimplePay.

As you can see from this sneak peek, the new PAYE modernisation functions are being built with the same user-friendliness that you have come to expect from SimplePay. However, we understand that change can be overwhelming. To support you through these changes, we will be releasing a guide on how to use the new functions on the system before the changes go live. Our help site will also be updated for you to refer to should you need it.

We look forward to supporting you along this journey into a new era of modern, convenient and even simpler cloud-based payroll.

A New Year – You’re Still Compliant

With the new tax year underway since 1 January, we’d like to reassure you that our system has been updated to ensure that you are always compliant with legislation. There is no need to do any manual updates as in other payroll systems – simply continue processing payslips into the new tax year. Your payroll will automatically meet all the requirements for the 2018 period, as announced in the 2018 Budget on 10 October 2017. If you are still processing payroll for the 2017 tax year, the old tax rules will still be used, as you’d expect.

 

Here are some of the most important changes that you may see in your payroll for the coming year:

Income Tax:

The standard rate income tax band for all earners increased by €750. This will be reflected in your employees’ P2Cs.

USC Rates:

The 2.5% rate of USC was reduced to 2% and the 5% rate of USC decreased to 4.75%

PRSI Rates:

The National Training Fund Levy (NTFL), collected alongside Employer PRSI for Classes A and H, increased by 0.1%. This means that the total employer PRSI contribution rates for Class A employees increases from 8.5% to 8.6% for employees earning €38 – €352, and from 10.75% to 10.85% for employees earning in excess of €376.

 

When you need to do your filing, the correct period will automatically be used and the relevant documents will be generated. For more information, please see our help site.

We will soon send out a year-end filing guide to assist you with submitting your P35 to Revenue and issuing P60s to your employees. Alternatively, you can consult our help site for more information.

If you have any questions relating to the above changes, you are welcome to contact us to assist you with these queries.

Team SimplePay