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.
- 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.
|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|
|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
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:
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