Payroll Year End

Payroll Year End

Payroll Year End is a particularly busy time for payroll professionals. With 2020 coming to an end, and given the multitude of upcoming developments that are/will affect Irish payrolls, we thought that we’d put together some tips and considerations to help you prepare for payroll year end.

Employer Tax Credit Certificates (P2Cs) 2021

2021 P2Cs are being / will be issued to employers for all of their employees advising thresholds and rates that are applicable from Jan 1st 2021. Employers, where possible, should not run 2021 payrolls until they receive 2021 P2Cs – if 2021 P2Cs are not received on time to run your payroll then you should continue to use your 2020 P2Cs for tax deductions and contact Revenue.

Be careful not to, from a year of repetition, upload 2021 P2C data to your 2020 payroll.

New Hires in 2020

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 1st 2021. 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

  • Since 1 January 2018 employers no longer need to include IB payments as part of the employee’s pay.
  • There is also no need for the employer to include details of IB on Forms P45, P60 or P35L after 31 December 2017.

Universal Social Charge (USC)

In 2021, if your income is €13,000 or less you pay no Universal Social Charge (USC). Once your income is over this limit, you pay the relevant rate of USC on all of your income. For example, if you have income of €13,000 you will pay no USC. If you have income of €13,001 you will pay 0.5% on income up to €12,012 and 2% on income between €12,012 and €13,001.

Standard rate of USC (2021)
RateIncome band
0.5%Up to €12,012
2%From €12,012.01 to €20,687
4.5%From €20,687 to €70,044
8%From €70,044.01 and over
11%Self-employed income over €100,000
Reduced rate of USC (2021)
RateIncome band
0.5%Income up to €12,012
2%All income over €12,012


Reduced rates of USC apply to:

  • People aged 70 or over whose total income for the year is €60,000 or less
  • Medical card holders aged under 70 whose total income for the year is €60,000 or less

Budget 2021

Personal Income Tax, Measures to support enterprise/SMEs/Agri-sector, Housing, Climate/Environment, Anti-Avoidance, Additional Taxation Measures & Employer’s PRS are some of the many aspects of Budget 2021 that will affect employers. It’s imperative that HR, payroll teams, accountant’s etc. are compliant with these updates. Payroll personnel of non-Paycheck Plus clients can familiarise themselves with the 2018 budget update here while Paycheck Plus clients can rest assured that their payroll is and will continue to be compliant with the most up to date regulatory changes.


For more on Revenue Updates read:

Deductions When Calculating Employee Net Pay

Temporary Wage Scheme

Revenue Updates Paycheck Plus Regulatory Compliance


Paycheck Plus, Your Outsourced Payroll Provider

Paycheck Plus is an award-winning Irish payroll company that specialises in payroll outsourcing. With industry-leading accuracy levels, strict levels of confidentiality, our affordable payroll service provides comprehensive outsourced payroll solutions to organisations of all sizes.

Our award-winning payroll firm offers a specialist payroll service which ensures payroll accuracy. Our payroll services include WRC inspection assistance, payroll consultancy and redundancy management. While our bespoke payroll software lets you consolidate your payroll processes into one simple and efficient workflow

For more information on our Irish payroll services simply request a payroll quote or call our Irish payroll bureau on +353 (0) 1 905 9400

Alternatively, you can contact our UK payroll agency on +44 (0) 161 464 8720