Employer’s Payroll Deduction Requirements

Statutory deductions from payroll such as PAYE, PRSI and USC for the Revenue Commissioners have been the responsibility of employers since the PAYE system was introduced in the late 1950s. Since then the calculation requirements and obligations on employers have continued to increase.  It now appears that employers will also be obliged to deduct the new Property Tax from the gross pay of their employees too.

Naturally the Government want to collect as much tax as possible in the current circumstances and following the low payment rate by householders to the local authorities, Revenue are looking to employers to collect the money directly from the pay of their employee and submit it to them in a manner similar to the collection of the pension levy.

Phil Hogan, Minister for the Environment told his party that the property tax should apply to all households benefitting from local authority services.  He believes that everyone should pay something although it is expected that the tax will be income related.  While the self employed are expected to submit payment through their annual returns, employers will be required to deduct the relevant Property Tax from the payroll of their staff.

Don Thornhill chair of a group compiling a report on the new tax for the government recommends that the Revenue collect the tax.  This will put additional burden of administration on employers as Revenue is expected to notify employers of the charges to be deducted from payroll for each individual.   It would then become the responsibility of the employer to calculate, deduct and submit payment to Revenue with no compensation for the additional work involved.

Payroll Taxes including PAYE, PRSI and USC are the single largest source of revenue for the Irish government and continue to account for more than Corporation Tax and VAT combined so it is essential that the administration and processing of payroll is completed by those with the necessary expertise.  Many employers rely on software to get it right but this can be dangerous as software depends on the correct input of data to work efficiently.

As legislation continues to become increasing more complex, employers face additional challenges to remain up to date on all payroll and employment legislation issues.  By getting it wrong, employers face huge penalties, fines and interest.  Outsource companies such as Paycheck Plus understand payroll  and work with employers to ensure their payroll is functioning efficiently and cost effectively enabling companies focus on their business.  For further details on how Paycheck Plus can help reduce your administrative burden and work on Making Payroll Easy for you, speak to one of our Payroll Team today on 041 686 3000 or visit www.paycheckplus.ie for more details of our services.

For an employers guide to USC, plese download our informative guide here – Employers Guide to Understanding USC