Payroll

Payroll

If you employ people, then you must set up a PAYE (Pay as You Earn) payroll system. This is to ensure that the correct amount of tax, Pay Related Social Insurance (PRSI) and Universal Social Charge (USC) (and any other deductions) is deducted from an employee and paid to the Revenue Commissioners on or before the pay date.

You are also required to give every employee a payslip for every pay period, detailing all payments and deduction made.

All employers in Ireland are required to operate a PAYE scheme for their employees. For the purposes of a PAYE scheme, it will include full and part-time employees and any workers or casual workers (and possibly directors, unless they receive dividends only).

Payrolls are run on a regular basis. The most common is monthly. However, some employers will be paid weekly, biweekly or 4 weekly.

Note: the more often you run your payroll, the more time it will take and hence the more costly it will be (especially if you outsourced your payroll), so a monthly payroll can be preferable.

Note: if you currently run a weekly payroll and want to move to monthly, you can do this by consulting with employees (see Contracts of Employment section). You may also want to support your colleagues financially (e.g., give them an advance) for the first couple of months to help them adjust.

For payroll purposes the tax year runs from 1^st January to 31^st December each year. A tax year contains 52 weeks.

Setting up a Payroll

Every employer must run a payroll, which identifies each employee, the gross amount paid, and the deductions withheld and paid over to Revenue.

When setting up a payroll system, the Revenue Commissioners needs to be contacted through their online portal www.ros.ie

There is substantial guidance for employers on how to register through www.revenue.ie/en/employing-people/becoming-an-employer-and-ongoing-obligations/registration-of-employers-for-paye-purposes/how-to-register.aspx

Real Time Information

Employers are required to send information to Revenue through ROS (Revenue Online System) on or before salary pay date. This provides details of each employee's pay and deductions for PAYE, PRSI and USC, along with details of any other statutory payments.

Practical Considerations:

Note: because of the obligations and complexities around payroll, many organisations outsource their payroll to a payroll provider.  

If you do run payroll in-house, you will need payroll software that will make calculations e.g., PAYE, PRSI and USC.  Because figures change every year, it is important to make sure you run your payroll with up-to-date software.