PAYE modernisation, commencing on January 1st 2019, will move your payroll reporting obligations from once a year (via P35) to real time reporting (RTR).

Employers will report pay, tax and other deductions to Revenue, as well as employees ending employment, at the same time as running the payroll. This means no more P30, P35, P45, P46 and P60 forms. Also, employees starting employment will have to be reported before the first payday.

What does this mean for your business and your employees?

While this will be particularly challenging for small businesses running manual payrolls and those with poor internet access, this change will affect every employer and employee in Ireland.

Employers will need to focus on the quality and accuracy of the data they will provide to Revenue on each pay day, so that the right tax is paid in the correct pay period, without delays. At the moment, it is unclear how Revenue will allow for corrections in case of a mistake when the payroll is run. Also, seasonal businesses will have to allow for reporting time during their busiest periods.

For employees, they will have full visibility of real time accurate data that employers are reporting to Revenue.

Why is Revenue making these changes?

At the moment, Revenue only becomes aware of each employee’s PAYE, USC and PRSI deductions at the end of the year via the P35. With PAYE modernisation, Revenue will achieve transparency and accuracy in real time. This will enable Revenue to intervene in case of discrepancies or malpractice.

What can you do to start preparing for this change?
There are some steps you can take to start getting ready; for example, you should make sure that:
1. You have the correct PPS number for each one of your employees.
2. You have registered all your employees with Revenue.
3. You have an updated tax cert for all your employees.
4. You have issued P45 for any employees who have stopped working for you.
5. You have controls in place to ensure all benefits are accurately calculated throughout the year.

If you run your payroll manually, maybe it is time to research a software programme that will allow you to run and report payroll in a more streamlined manner. If this is not financially viable for you, you should consider outsourcing your payroll to an accountancy firm like us. We have the systems in place to run your payroll and meet your reporting obligations.


The blog does not purport to give any definitive taxation or professional advice on any matter. Any information contained herein is not a substitute for direct consultation with one of our professional team. We have made every attempt to ensure that the information contained herein is accurate, but we are not responsible for any errors or omissions. We do not represent that the information herein is comprehensive or complete in the sense that it discusses all issues of relevance to a particular situation. We do not accept responsibility or liability in any circumstances in respect of the accuracy or content of this information