Dec 2015
1
Week 53: Irish Payroll
Are you due a week 53?
Employers are only due a week 53 if there are 53 pay dates in the tax year. This situation will arise for employers in 2015 where their pay date falls on a Thursday. This is due to the fact that their first pay date fell on Thursday 1st January and their last pay date falls on Thursday 31st December. Employers with any other pay date will not be due a week 53. The same principle applies for employers who run fortnightly payroll (they are only due a week 54 if there are 27 pay periods in the tax year).
Week 53 PAYE Deductions
Employers should apply employee’s tax credits and standard rate cut off points on a week 1 basis. This means employees will get the benefit of more than one year’s tax credits and cut off points. Where an employee is on an emergency basis then an emergency basis should continue to apply.
Week 53 USC Deduction
Employers should apply USC standard cut offs on a week 1 basis. This is a change from last year where there were no additional thresholds granted. If an employee is on an emergency basis then an emergency basis should continue to apply for week 53. If an employee is exempt from USC they will continue to be exempt in week 53.
Week 53 PRSI Deduction
There is no change to the way PRSI is calculated.
Jul 2015
27
Minimum Wage Vs Living Wage
Minimum Wage
The minimum wage is the lowest rate of pay that employers can legally pay to workers. Presently in Ireland the minimum wage stands at €8.65 per hour (apart from exceptions for apprentices etc.). However a low pay commission group is to be established and is expected to recommend an increase of €0.50 per hour. The commission is likely to be modelled on a similar body in the UK, which has employer and trade union representatives. Tánaiste Joan Burton said the minimum wage needs to be kept under constant review due to cost of living increases.
Employers’ groups such as Ibec and business groups such as the restaurant sector are strongly opposed any increase in the minimum wage and believe that any increase will inevitably lead to job losses and risk the economy’s fragile recovery. “There is no justifiable economic argument for imposing a 6% increase on SMEs when inflation is practically zero,” ISME’s Mark Fielding said. The Small Firms Association called on the government to reject the proposals, and freeze the minimum wage for the next three years.
Meanwhile the Unite trade union expressed its disappointment believing the proposed rise does not go far enough in its submission to the commission, it had sought a €1 increase.
The Living Wage
A living wage is based on the amount an individual needs to earn to cover the basic costs of living. A coalition of groups says this is about €11.45 an hour, significantly above the minimum wage of €8.65 an hour. Earnings below the living wage suggest employees are forced to do without certain essentials so they can make ends-meet. Ms Burton has encouraged employers to commit to paying a “living wage” to their employees. She has that this will benefit society by giving lower paid workers more spending power and reducing reliance on social welfare. However Ms Burton said the move towards a living wage should initially be on a voluntary basis, rather than a legally enforceable level of pay like the national minimum wage. In recent days Ikea in Ballymun announced that it will be introducing the living wage for all Irish and UK employees. Ms Burton has said “If people get a living wage, they have more spending power, more financial independence and can move away from welfare dependency. It benefits the family and the exchequer.”
Jul 2015
1
PAYE Anytime
What is PAYE Anytime?
PAYE Anytime is the Revenues On-Line Service for employees. The service offers PAYE tax payers a secure way to manage their tax affairs online. PAYE Anytime is a self assessment system so employees are responsible for the information they provide.
You can register for PAYE Anytime by going to revenue.ie or by clicking on the below link.
https://www.ros.ie/selfservice/enterRegistrationDetails.faces
Fill in your personal details and a Revenue Pin will be posted to you.
What can you do on PAYE Anytime
• View your own tax records
• You can claim a wide range of tax credits
• You can use your profile to update your personal details; revenue can then use this information to suggest additional tax credits you may be entitled to
• You can claim a repayment for items such as health expenses (all receipts should be kept for a 6 year period)
• Request a P21 balancing statement (end of year review) for any of the last 4 years
• You can enter your bank account details so any refund due to you can be deposited directly to your bank account (revenue will not deduct money from your account if you have a tax liability)
• You can also declare additional income earned such as B.I.K’s and dividends
• If you are jointly accessed you can reallocate some of your tax credits or standard rate band between you and your spouse
• If you have multiple incomes you can reallocate your tax credits or standard rate band between your incomes
You don’t have to submit a paper claim when you submit transactions through PAYE Anytime. The service cannot be used by employees who submit a Form 11 or a Form 12 tax return to revenue on an annual basis.
PAYE Anytime now allows you to view your tax records from any computer or smart phone.
Mar 2015
16
TaxSaver Commuter Ticket Scheme
Established in 2000, the TaxSaver Commuter Ticket Scheme is an incentive for workers to use public transport and is seen as a way to encourage the use of public transport. The scheme is operated in conjunction with the Revenue Commissioners. The scheme involves employers providing employees with bus and rail commuter tickets while saving on employer PRSI payments.
The employers and employees must sign a contract agreeing to participate. The employer then applies for commuter tickets for employees. Information on tickets are available from Dublin Bus, Irish Rail, Bus Éireann, Luas, and approved private operators websites. Detailed information sheets on each type of ticket are also available for distribution to employees.
Employees participating in the scheme may receive the tickets through salary sacrifice, in lieu of an annual cash bonus, or as a benefit-in-kind. It costs employers and employees nothing to join the scheme itself.
Through salary sacrifice employees receive TaxSaver commuter tickets as part of their basic salary package. They then benefit from reduced Income Tax, PRSI and Universal Social Charge (USC) payments due to the fact that the cost is a tax allowable deduction.
Employees only have to pay tax, PRSI and USC on the "money" portion of their salary. Employer PRSI is also calculated on the "money" portion of the employee's salary.
Employers can achieve PRSI savings of up to 10.75% and employees can save between 31% and 52% of travel costs as a result of tax, PRSI and USC savings by participating.
Companies must keep a receipt of purchase and a copy of the ticket for their tax records.
Dec 2014
17
Week 53 - Irish Payroll
Are you due a week 53?
Employers are only due a week 53 if there are 53 pay dates in the calendar year. This situation will arise for employers in 2014 where their pay date falls on a Wednesday. This is due to the fact that their first pay date fell on Wednesday 1st January and their last pay date falls on Wednesday 31st December. Employers with any other pay date will not be due a week 53. The same principle applies for employers who run fortnightly payroll (they are only due a week 27 if there are 27 pay periods in the calendar year).
Week 53 PAYE Deductions
Employers should apply employee’s tax credits and standard rate cut off points on a week 1 basis. This means employees will get the benefit of more than one year’s tax credits and cut off points. Where an employee is on an emergency basis then an emergency basis should continue to apply.
Week 53 USC Deduction
Where your employees operate on a cumulative basis continue to operate on a cumulative basis for week 53. For the purposes of USC there is no additional thresholds granted. If the employee has used all their USC cut offs in week 52 they will pay USC at the higher rate in week 53. Where your payroll operates on a week 1/month 1 basis employees will pay USC at the top rate. If an employee is on an emergency basis then an emergency basis should continue to apply for week 53. If an employee is exempt from USC they will continue to be exempt in week 53.
There is no change to the way PRSI is calculated.
Dec 2014
14
Changes for Employers to Medical Insurance Relief (IT5)
Changes to Medical Insurance Relief include a limit on the tax relief granted on medical insurance premiums, employees claiming relief due on their Tax Credit Certificate (TCC), and employer’s payment of tax relief amounts to the Collector-General.
Limit on the tax relief granted
For insurance policies taken out or renewed after October 15, 2013, the tax relief on medical insurance premiums is capped at €1,000 per adult and €500 per child. Relief continues to be granted at 20%. A child for these purposes includes a student over 18 years and under 23 years who is in full-time education. Prior to the change, tax relief was available on the full gross premium paid at a rate of 20% for all qualifying medical insurance premiums.
Tax relief on private health insurance premiums
Where an individual employee pays medical insurance premiums directly to the medical insurer, they may get a tax credit. This tax credit is granted directly by the insurance company. The premium will be reduced by the amount of the tax credit. This is known as Tax Relief at Source (TRS). This tax relief is at 20% but capped at €1,000 per adult and €500 per child.
An example of when an individual pays 100%:
Gross Premium €1,500
Amount on which TRS is calculated €1,000
TRS (€1000*20%) €200
Reduced premium payable to insurer €1,300
Tax relief on employer paid health insurance premiums
Where an employer pays the medical insurance premiums on behalf of an employee, the Tax Relief at Source (TRS) system does not apply. The employer must pay the tax relief amount of the policy to the Collector-General.
An example of when an employer pays 100%:
Gross Premium €1,500
Tax relief related to employer share (€1000*20%) €200
Net payment made by the employer to the insurer €1,300
Employer pays to the Collector General €200
In these circumstances a Benefit in Kind charge will arise on the gross premium and be subject to PAYE, PRSI and USC. Since the employee has not benefited from the TRS system they will instead be entitled to the tax credit in their Tax Credit Certificate (TCC). Therefore, it is necessary to calculate the amount of relief the employee is entitled to and make the claim to the Revenue Office. The employee’s medical insurance eligibility for tax relief will be stated on the P35 return. If a medical insurance policy was entered into or renewed on or before 15th October 2013 and falls for renewal in 2014, a mixture of the old and new relief will be done.
Nov 2014
9
New strategic state bank to help fund SMEs
The new Strategic Banking Corporation of Ireland (SBCI), a multi-funded strategic bank, was launched by the government on Friday. The aim of the state-backed scheme is to make lending available to small and medium sized businesses.
Minister for Finance Michael Noonan and Minister for Public Expenditure Brendan Howlin launched the scheme in a ceremony in Farmleigh House in Phoenix Park, Dublin. German finance minister and the head of the European Investment Bank (EIB) were also in attendance.
The new SBCI will make an initial €800 million available for SMEs to borrow money at more favourable terms, allow for longer term loans, and to support expansion and job creation. Mr Noonan said “we have big plans for the SBCI and it will be a key source of funding for years to come”.
Initially the SBCI will be jointly funded by €150m from German Bank KFW, €400m from the European Investment Bank (EIB), and €240 from the Ireland Strategic Investment Fund (ISIF).
The scheme is designed to help restart lending to SMEs and could facilitate up to €5 billion in lending to the SME sector over 5 years. Taoiseach Endy Kenny said “it will finance SMEs in first instance but can grow to finance other key sectors of the economy.”
Ireland’s SME sector has suffered a squeeze on credit and investment. SMEs can begin accessing the loan scheme from December this year and it will be administered by AIB and Bank of Ireland.
German finance minister Wolfgang Schäuble said “I am confident the SBCI will help improve the economic situation and labour market in Ireland and contribute to Europe.” EIB president Werner Hoyer said the scheme could be a model for other European countries.
Oct 2014
12
Irish Employers Save 57% on Staff Rewards this Christmas!
Employers can save up to 57% on staff rewards by taking advantage of the Government Small Benefits Exemption Scheme.
To qualify for the tax exemption only one non cash bonus to a maximum of €250 may be paid to each employee in any tax year. It is often called the Christmas bonus scheme due to the fact that it is usually paid at Christmas time. Employers should be warned that if the value of the non cash benefit exceeds the limit of €250 then the full value of the benefit will be subject to PAYE, PRSI and USC.
