Oct 2020
15
Budget 2021: Employer Payroll Focus
Here are the main points from Budget 2021, as delivered by Minister for Finance Paschal Donohoe.
Pay As You Earn (PAYE)
There is no change to tax rates for 2021, the standard rate will remain at 20% and the higher rate at 40%.
In addition, there is no change to Standard Rate Cut Off Points (SRCOPs).
Earned Income Tax Credit
The Earned Income Tax Credit will be increased by €150 from €1,500 to €1,650 to bring it in line with the PAYE tax credit.
Dependent Relative Tax Credit
The Dependent Relative Tax Credit will be increased by €175 from €70 to €245 to support families with caring responsibilities.
Universal Social Charge (USC)
- Exemption threshold remains at €13,000
- 2% threshold increased by €203 from €20,484 to €20,687
- Due to the increase to the 2% threshold, the income chargeable at 4.5% reduces from €49,560 to €49,357
- There are no changes to the rates of USC
For 2021, USC will apply at the following rates for those earning in excess of €13,000
| Rate Bands | Rate |
| Up to €12,012 | 0.5% |
| Next €8,675 | 2% |
| Next €49,357 | 4.5% |
| Balance | 8% |
Medical card holders and individuals aged 70 years and older whose aggregate income does not exceed €60,000 will pay a maximum rate of 2%.
The emergency rate of USC remains at 8%.
Non-PAYE income in excess of €100,000 is subject to USC at 11%.
National Minimum Wage
The National Minimum Wage will increase by 10 cent from €10.10 to €10.20 per hour from January 1st 2021.
Pay Related Social Insurance (PRSI)
The weekly threshold for the higher rate of employer PRSI will increase to €398 from €395, this is in line with the increase in the National Minimum Wage.
State Pension Age
The age to qualify for the State Pension will remain at 66 for 2021, it was due to increase to 67.
Illness Benefit
The ‘waiting days’ for Illness Benefit will reduce from 6 days to 3 days for all new claims from the end of February 2021.
Parent’s Leave
Parent’s Benefit has been increased by three weeks, this brings it up to five weeks. The leave must be taken during the first year following the birth of a child.
Wage Subsidy Scheme
The Employment Wage Subsidy Scheme (EWSS) is due to continue until 31st March 2021, a wage subsidy scheme in some form is expected to be in place until the end of 2021.
Warehousing of Tax Liabilities
The tax debt warehousing scheme will be expanded to include repayments of the Temporary Wage Subsidy Scheme (TWSS) owed by employers.
Covid Restrictions Support Scheme (CRSS)
A new scheme was introduced for businesses impacted by Covid-19 restrictions, it will provide support for businesses that have had to close because of Covid-19. The scheme is operational from October 13th until March 31st 2021.
The payment will be calculated as a percentage of the business’s average weekly VAT exclusive turnover in 2019 subject to a maximum payment of €5,000 per week. The first payments are expected to be made in Mid-November.
VAT
The 13.5% rate of VAT for the tourism and hospitality sector will be reduced to 9% from November 1st 2020, the reduced rate will remain in place until December 31st 2021.
For the latest payroll updates, don’t miss our next free webinar where we are joined by Revenue.
Webinar: Wage Subsidy Scheme with Revenue
10.30am | 19th November
Webinar Agenda
- TWSS Reconciliation
- Employment Wage Subsidy Scheme - Key Points
- Employer & Employee Eligibility Criteria
- Operation of Payroll & Processing of Subsidy Claims
- Operating EWSS with BrightPay & Thesaurus Payroll Manager
- Q&A Panel Discussion
If you are unable to attend the webinar at the specified time, simply register and we will send you the recording afterwards.
Related Articles:
BrightPay COVID-19 Resource Hub
Blog: Customer update October 2020
On-demand COVID-19 Webinars
Oct 2020
14
Revenue Start Compliance Checks and TWSS Reconciliation
The Temporary Wage Subsidy Scheme – also known as TWSS, was in operation since 26th March, and it ended on 31st August. The subsidy was processed through the payroll as a non-taxable addition, and instead, the subsidy will be taxable and USC-able via an end of year review by Revenue.
Employees will be taxed via a reduction in tax credits and cut off points from 2022. Revenue have confirmed that the liability will be collected over 4 years to avoid hardship. Employees will have the opportunity to pay it in full before then if they wish.
Reconciliation Process Stage One
There are two stages to the TWSS Reconciliation process. For stage one, employers are required to report the actual subsidy that they paid to employees on each pay date.
BrightPay makes it easy to create these TWSS CSV Reconciliation files within the 'Employees' section of the payroll software. The CSV file can then be uploaded in the Employer Services section on ROS, as per Revenue's requirements. This file must be uploaded to ROS by 31st October. If you do not provide this data about payments to your employees, Revenue will recoup the total temporary wage subsidy paid and related interest charges.
Stage Two of the Reconciliation Process
Stage two of the reconciliation process is due to commence later this month, and during this stage, the total subsidy payable amounts will be compared against the subsidy amounts paid to the employer. Revenue will then determine the amount of TWSS, if any, owing back to Revenue from employers.
A Statement of Account will be sent to your ROS inbox. You will either be paid any additional amount due to you by Revenue or be required to repay any amount that you owe to Revenue.
In some cases, an employer may decide, or Revenue may instruct the employer, to repay to Revenue some or all the subsidy refund payment received from Revenue. Employers can repay excess subsidy values to Revenue via a new facility within ROS, this can be done under Payments & Refunds by selecting ’Submit a Payment’ and then TWSS (Employer). Customers should no longer use the Revenue bank account details previously provided for repayments of TWSS.
Only subsidy amounts should be repaid to Revenue through this method - Do not include any repayments in respect of income tax and USC through this RevPay facility. This should be done separately under PAYE EMP to ensure that the payment is correctly reflected on the employers PAYE EMP balance.
TWSS Compliance Check Programme
To ensure that the TWSS was operated correctly, Revenue are conducting a programme of compliance checks on all employers who availed of the scheme at any stage. Letters are being issued to employers and tax agents. Revenue were previously sending these to certain employers/agents via MyEnquiries. Since the start of October, Revenue have started sending them direct to the main ROS inbox, along with all other correspondence, so there’s a greater chance that they could be missed.
The letter will set out the steps that employers need to take to verify their compliance with the regulations of the TWSS.
Employers will need to confirm:
- That they have met the eligibility criteria (e.g. details of the negative impact suffered, business closure dates, evidence of meeting 25% reduction in turnover)
- That employees received the correct amount of subsidy
- That the subsidy was recorded correctly on the payslips (e.g. copies of payslips)
At this point employers are not expected to provide detailed documentation to prove that they have met the employer eligibility criteria but based on the summary provided, Revenue may look for more detailed information in some cases.
What to do if you receive a letter
If you receive such a letter, please note that there is a 5-day time limit to respond to the Revenue’s request. It is essential that employers respond promptly as failure to do so will lead to immediate escalation. Therefore, it is important that employers keep an eye on both the ROS inbox and MyEnquiries or the letter.
This Revenue compliance check is not part of an audit or intervention. Instead, it is a request for information to provide assurance that the scheme was operated as intended by employers.
In addition, the compliance check programme will address any issues identified in respect of the operation of PAYE Modernisation by employers over 2019 and 2020. It will also provide an opportunity for employers to address any other outstanding tax issues that they may have.
For the latest payroll updates don’t miss our next free webinar, where we are joined by Revenue.
Webinar: Wage Subsidy Scheme with Revenue
10.30am | 19th November
Webinar Agenda
- TWSS Reconciliation
- Employment Wage Subsidy Scheme - Key Points
- Employer & Employee Eligibility Criteria
- Operation of Payroll & Processing of Subsidy Claims
- Operating EWSS with BrightPay & Thesaurus Payroll Manager
- Q&A Panel Discussion
If you are unable to attend the webinar at the specified time, simply register and we will send you the recording afterwards.
Related Articles:
BrightPay COVID-19 Resource Hub
Blog: Customer update October 2020
On-demand COVID-19 Webinars
Oct 2020
6
Cycle to Work Scheme Changes: What you need to know
In the July Jobs Stimulus Plan, announced by Taoiseach Micheál Martin, changes were introduced to the existing Cycle to Work scheme. The Cycle to Work scheme is a government initiative that was introduced in January 2009 and allows the employer to purchase a bicycle and safety equipment for an employee for travelling to and from work. The cost of the bicycle and safety equipment can be deducted from the employee’s wages in the form of salary sacrifice. This salary sacrifice is set up as an allowable taxable deduction and reduces the gross salary for PAYE, USC and PRSI purposes by the amount of the salary sacrifice. The salary sacrifice cannot be more than 12 months and the employer and employee must agree how the deductions can be made.
The allowance for the cost of the normal bike and safety equipment was €1,000 and in July this was increased by €250 to €1,250. The allowance cost of an electric bike and safety equipment rose to €1,500 from the previous rate of €1,000. The existing period to avail of the scheme every five years is being reduced to every four years. The tax year that the bike is purchased counts as the first year under the scheme. The bike and safety equipment must be used as part of the journey the employee takes between their home and their normal place of work.
If an employer purchases a bike for an employee and does not require the employee to pay for it, the employee will be exempt from tax on the benefit on the cost of a normal bike up to €1,250 and on an electric bike for up to €1,500. If the cost exceeds these exemptions, the employee will have to pay PAYE, USC and PRSI on the balance of the cost of the bike.
An employer does not have to inform Revenue if they have employees availing of the Cycle to Work Scheme but records must be maintained by the employer for any purchases made under this scheme, such as invoices, which employee the purchase was for, payment amounts, etc.
New webinar: Employment Wage Subsidy Scheme (EWSS) - What you need to know
Join our new webinar, Employment Wage Subsidy Scheme (EWSS) - What you need to know, to learn about the latest government scheme and its impact on payroll. As the Temporary Wage Subsidy Scheme has now ended, there is a new Employment Wage Subsidy Scheme which will run until April 2021. Register now.
In this webinar, we discuss what you need to know about TWSS Reconciliation and the Employment Wage Subsidy Scheme (EWSS). We are delighted to be joined by guest panelist Sandra Clarke - President of the Irish Tax Institute & Partner at BCC Accountants. Register now.
Related links:
Don't forget about your July / August EWSS Sweepback!
Increase to CWPS Rates on 1st October 2020
Webinar: Employment Wage Subsidy Scheme (EWSS) - What you need to know
Oct 2020
1
BrightPay Customer Update: October 2020
Welcome to BrightPay's October update. Our most important news this month include:
-
Deadline for EWSS Sweepback is fast approaching!
-
Increase to CWPS Rates on 1st October 2020
-
Remote working is becoming ‘The New Normal’ - What does this mean for payroll?
TWSS Reconciliation - Upload to ROS before 31st October
As the Temporary Wage Subsidy Scheme is now closed, to enable an accurate reconciliation between subsidy amounts refunded by Revenue and the amounts of subsidy that employers paid to their employees, Revenue requires employers to report the actual subsidy paid to employees, on each pay date. TWSS Reconciliation files can be created in BrightPay within Employees > Reconciliation CSV File. This file must be uploaded to ROS by 31st October.
How Does Remote Working Affect Payroll and HR?
When employees are working remotely, even the most basic tasks such as distributing payslips, applying for annual leave and internal communication can be more difficult. However, in the wake of COVID-19, many employers have had to adapt and implement working from home and are now looking for clever solutions to overcome the payroll and HR challenges presented by remote working.
Are you entitled to EWSS for July & August? Don’t miss the sweepback deadline
If you are currently eligible for EWSS, you may be entitled to receive subsidies and PRSI credits in respect of employees paid by you during July and August. In order to make a claim, a CSV file must be uploaded on ROS before 14th October. BrightPay includes the ability to prepare the CSV file within the ‘Employees’ menu. It will also calculate the estimated claim value for you. Claims could be quite substantial, so we urge you to run the report and, if applicable, submit your claim as soon as possible.
Free Webinar: Employment Wage Subsidy Scheme – Extra Dates Added
After the success of our previous booked-out webinar, we have decided to add another date. Join us on 8th October where we discuss TWSS reconciliation, EWSS sweepback and processing wage subsidy claims. Guest panelist: Sandra Clarke - President of the Irish Tax Institute.
Only 10 places left - Book your place now to avoid disappointment!
BrightPay Connect’s Employee Calendar: Track Attendance at a Glance
The company-wide employee calendar on BrightPay Connect allows managers to see at a glance who is on leave and when, with different display options to suit your needs. The colour-coded calendar highlights the various types of leave, including annual leave, unpaid leave, sick leave and parenting leave, making staff scheduling and managing leave a walk-in-the-park.
