Nov 2017
24
Premature births & maternity benefit
From 1st October 2017, the period for which Maternity Benefit is paid has been extended in cases where a baby is born prematurely. A premature birth is described as one at less than 37 weeks’ gestation. It is estimated that every year in Ireland approximately 4,500 babies are born prematurely.
Currently, under the Maternity Protection Acts 1994 and 2004, a mother is entitled to 26 weeks’ maternity leave and 16 weeks’ unpaid leave. Maternity leave normally starts two weeks before the babies expected due date or on the date of the birth of the child should it be earlier.
Under the new amendment, where a child is born prematurely the mother’s paid maternity leave will be extended by the equivalent of the duration between the actual date of birth of the premature baby and the date when the maternity leave was expected to start. For example, where a baby is born in the 30th week of gestation the mother would have an additional entitlement of approximately 7 weeks of maternity leave and benefit i.e. from the date of birth in the 30th week to the two weeks before the expected date of confinement. This additional period will be added onto the mother’s normal entitlement to 26 weeks of maternity leave and benefit, where the mother meets the ordinary qualifying criteria.
Mothers of preterm babies are advised to contact the Department of Employment Affairs and Social Protection (DEASP), email [email protected], to arrange the additional payment.
Babies surviving from the earliest gestations, such as 23 weeks, can spend months in a neonatal unit in hospital, by the time a premature baby gets to go home, a mother’s maternity leave can almost be used up. This new change has been heralded as a positive step in supporting parents during a difficult time.
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Nov 2017
20
Taxation of Illness Benefit - 2018
Currently, employers are required to tax Illness Benefit and Occupational Injury Benefit payments paid to employees by the Department of Employment Affairs and Social Protection (DEASP).
With effect from 1st January 2018, employers will no longer be responsible for taxing Illness Benefit. From this date Revenue will tax Illness Benefit by adjusting employee's tax credits and/or rate bands. Revenue will receive real-time interfaces of taxable DEASP income and the adjusted tax credits and/or rate bands will be notified to employers via P2C files. As a result of this change there will be more frequent P2Cs for employees. While payroll operators will no longer need to tax Illness Benefit, it will be extremely important to implement amended P2Cs immediately.
In addition, from 1st January 2018 Illness Benefit letters will no longer be delivered to the ROS Inbox. In light of this change, employers may need to review their sick pay schemes.
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Thesaurus Payroll Software | BrightPay Payroll Software
Nov 2017
14
PAYE Modernisation – What do these changes mean for you?
The existing PAYE (Pay As You Earn) system was introduced nearly sixty years ago ensuring that correct deductions are made relating to pay and tax.
From 1st January 2019, this system for PAYE will undergo a long overdue update, but don’t worry, this update will benefit all involved – including employers and employees.
Employers –
PAYE Modernisation will change how employers report their payroll information to Revenue. Every time an employee is paid a file will need to be submitted (electronically) to Revenue, consisting of all details of employee payments, deductions and leaver information. The contents will be similar to the current annual P35, but this file will be submitted every pay period (weekly, monthly, fortnightly, etc.).
The update will also allow employers to submit a new employee’s information before they commence employment with them. PAYE Modernisation / Real Time Reporting (RTR) will result in a reduction in the occurrence of year end over/underpayments of tax.
This new Revenue reporting system is anticipated to be fully integrated into payroll software. Fortunately, it is envisaged that the workload will not increase as a result of PAYE Modernisation.
Employees –
An online statement will be sent before the start of the new tax year which will detail the employee’s tax credits and standard cut-off point (SRCOP). This will be based on estimated income and details available to Revenue.
Employees will be encouraged to make any adjustments to this online statement, including any claims for additional entitlements. This differs from the current system where an employee is required to wait until the end of the tax year to apply for any refund as a result of overpayment of taxes or to find out if there are amounts due to Revenue as a result of underpayment of taxes.
P60s will be abolished, employees will instead have access to their pay and tax record online, this will be updated on an ongoing basis throughout the year as they are paid. This will enable Revenue to carry out periodic reviews to identify if employees are utilising their tax credits and SRCOP to the maximum effect (e.g. where an employee has 2 employments) and, where applicable, employees will be prompted to reallocate tax credits and SRCOP.
Related articles
- PAYE Modernisation - Are You Ready For January 2019?
- Revenue moves to PAYE Modernisation
- Auto Enrolment Planned for Ireland by 2021
- 2018 and Beyond
Nov 2017
6
PAYE Modernisation - Are You Ready For January 2019?
Revenue has released an information leaflet titled “PAYE Modernisation – Are You Ready?”. This kick-starts their awareness campaign for businesses to get ready for payroll changes called PAYE Modernisation or Real Time Reporting (RTR). Revenue outlines the steps that all employers need to take in order to ensure that their current records and obligations are up-to-date and correct.
PAYE Modernisation will change how employers report payroll information for their employees to Revenue. A file will need to be submitted (electronically) to Revenue, containing all details of employee payments. The contents are similar to the annual P35, however, this file will be submitted every pay period (weekly, monthly, fortnightly, etc.).
If you are an employer who uses payroll software, then the work involved to comply with PAYE Modernisation will be minimal. However, for smaller employers who do not use payroll software, the process of complying with PAYE Modernisation will be time-consuming and stressful. Currently, these employers make one manual submission to Revenue through their annual P35. With PAYE Modernisation, these employers will be required to make an employer submission to Revenue each pay period in real time. The employer submission will contain details comparable to what currently appears on an employer’s P35 return.
With PAYE Modernisation in mind, Revenue has contacted nearly 400 employers regarding their P35L returns for 2016. These returns contained employees who were never previously registered as working with the employer. This communication reminds those employers of their obligation to comply with PAYE regulations and requests those employers to submit a P46 for the non linked employees currently in their employment, the commencement date should be input as 1st January 2017 for employees that commenced employment before the current tax year. This action will then result in a new P2C (tax credit certificate) being issued for these employees.
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Nov 2017
2
Auto Enrolment Planned for Ireland by 2021
Taoiseach Leo Varadkar said that the Government will publish a five year roadmap for pension reform before the end of the year. This will include the introduction of an auto-enrolment pension scheme for private sector workers, two-thirds of whom currently have no occupational pension to supplement their state pension. The first payments are expected to be made into new individually held funds by 2021.
He said the government would “work closely and consult with employers” in designing the new scheme. The Minister for Employment & Social Protection Regina Doherty, said that there will be no discrimination in the new auto-enrolment pension scheme proposed by Taoiseach Leo Varadkar.
“You can’t discriminate somebody that’s earning 20 grand to somebody that’s earning 40 grand,” said Minister Regina Doherty.
“But it’s always going to be based on the percentage, so whatever percentage you put in, the employer will put in a percentage and the State will put in a percentage, and we have to work out the details as to what that percentage will be.”
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Nov 2017
1
10% pay rise for Construction Sector under new Sectoral Employment Order
A Sectoral Employment Order (SEO) for the general construction industry has been signed into law by the Minister for State at the Department of Business, Enterprise and Innovation, Pat Breen.
Effective from 19th October 2017, the order provides for mandatory terms and conditions in the construction sector, including pay, pensions and sick leave. In finalising the Order, the Labour Court received submissions from the Construction Industry Federation (CIF), UNITE the Union, the Irish Congress of Trade Unions and the Trustees of the Construction Workers Pension Scheme.
Who does the Order affect?
The Order applies to employers in the construction sector, regardless of whether or not they are CIF members. The sector is defined to include both “Building Firms” and “Civil Engineering Firms”, examples will include companies involved in; construction, reconstruction, alteration, repair, painting and decorating. It is estimated that the new Order will apply to approximately 50,000 workers. Notably electricians and plumbers are not included.
Hourly Rates
The new minimum hourly pay rates are:
- New Entrant Workers: €13.77
- Category 1 Workers (General Operatives with more than 1 years’ experience: €17.04
- Category 2 Workers (Skilled General Operatives): €18.36
- Craft Workers (Includes: Bricklayers, Carpenters, Plasterers): €18.93
- Apprentices
- Year 1: 33.3% of Craft Rate
- Year 2: 50% of Craft Rate
- Year 3: 75% of Craft Rate
- Year 4: 90% of Craft Rate
These new rates are approximately 10% higher than they had been under the previous Registered Employment Agreement (REA).
Unsocial Hours
The following unsocial hours payments will now apply:
- Monday to Friday, normal finish time to midnight: time and a half
- Monday to Friday, midnight to normal starting time: double time
- Saturday, first four hours from normal starting time: time and a half. All subsequent hours until midnight: double time
- Sunday, all hours worked: double time
- Public holidays, all hours worked: double time plus an additional day’s leave
Pension Scheme and Sick Pay Scheme
The Order provides that employers must provide pension benefits with no less favourable terms than those in the Construction Workers Pension Scheme (CWPS). The Order also provides for a mandatory sick pay scheme, in recognition of the health and safety risks posed to industry workers.
Dispute Resolution
The Order includes a new dispute resolution procedure. No strike or lock-out is allowed unless and until all stated dispute resolution procedures have been exhausted.
Where to from here?
The Order is a significant development for those in the general construction industry. Employers will need to review their payment practices to ensure that they comply with the new requirements.
To keep up with the latest payroll news, check out our new Bright website. There, you'll be able to register for any of our upcoming payroll webinars and download our payroll guides.
To book a free online demo of Bright Contracts click here
To download your free trial of Bright Contracts click here
Oct 2017
25
Making an Employee Redundant
A redundancy situation can often arise in the following situations:
- an employee’s job ceases to exist
- the employer ceases to carry on the business
- the requirement for employees has diminished
- an employee is not skilled for work that is to be done
In the event of a redundancy, employees are covered under Redundancy Payments Acts 1967-2014, if they meet the following requirements:
- aged 16 or over
- have at least 2 years continuous service (104 weeks)
- are a full-time employee insurable under PRSI class A, or PRSI Class J for a part-time employee
How to calculate Statutory Redundancy Pay
Statutory Redundancy is payable at a rate of:
- 2 weeks’ pay for each year of service. If the period of employment is not an exact number of years, the excess days are credited as a portion of a year
- plus one week’s pay
The term ‘pay’ refers to the employee’s current normal gross weekly pay, including average regular overtime and benefits in kind. The above, however, is based on a maximum earnings limit of €600 per week (before PAYE, PRSI & USC).
An employer may also choose to pay a redundancy payment above the statutory minimum. In such circumstances, the statutory payment element will be tax free but some of the lump sum payment may be taxable.
To keep up with the latest payroll news, check out our new Bright website. There, you'll be able to register for any of our upcoming payroll webinars and download our payroll guides.
Oct 2017
19
Customer Update - October
Free Webinar: What you NEED to know about PAYE Modernisation
PAYE Modernisation is probably the biggest overhaul of the PAYE system since PAYE itself was introduced back in 1960. It will have wide ranging effects on all employers. Register now for our free webinar to find out what you need to know about PAYE Modernisation. Speakers include Paul Byrne (Thesaurus Software) & Sinead Sweeney (Revenue)
CPD Webinar: GDPR for your Payroll Bureau (Bureaus Only)
Data protection and how personal data is managed is changing forever. On 25 May 2018 the new General Data Protection Regulation (GDPR) will come into force. The GDPR is a European privacy regulation replacing all existing data protection regulations. Register now for our free, CPD accredited webinar to find out how this new legislation will affect your payroll bureau.
"What do you mean... Do I have a backup?” - A day in the life of Customer Support
One of the most common calls on the support line is from a distressed customer who tells us they have lost their payroll information. Reasons for the loss of this information are varied and could be anything from a laptop being stolen, a virus attacking the computer or fire or water damage to the computers in the office.
Take a look at BrightPay Payroll Software
Brought to you by Thesaurus Software, Ireland's number one payroll provider. With over 100,000 businesses across Ireland and the UK, you can guarantee BrightPay is the perfect solution for your bureau. BrightPay's bureau licence includes unlimited employers, unlimited employees and free support - all for just €299 per year.
BrightPay Connect - Try for Free
We are giving customers one free BrightPay Connect 2017 licence. With BrightPay Connect, employers can login to their own personal employer dashboard where they can access employee payslips, payroll reports and a company wide calendar. It also includes a self-service portal for employees to view payslips and request annual leave.
Redeem your free licence / Book a demo
New Automatic Enrolment Pension System to be in place by 2021?
Brian Hayes MEP has called on Minister for Social Protection, Regina Doherty to start work on the introduction of an automatic enrolment pension system, whereby all Irish private sector employees would be automatically enrolled into a pension scheme.
BrightPay Customer Survey: The Results are in!
In our recent survey, we were delighted to discover that BrightPay has a 99% customer satisfaction rate. Customers are also highly satisfied with our customer support team, with a satisfaction rate of 98%.
Oct 2017
11
Budget 2018 - Employer Payroll Focus
Pay As You Earn (PAYE)
- There was no change to tax rates for 2018, the standard rate will remain at 20% and the higher rate at 40%.
- Standard Rate Cut Off Points (SRCOPs) will be increased by €750 from 1st January 2018.
Emergency Basis of PAYE
Employee provides PPS Number:
Where an employee does not provide their PPS Number the higher rate of 40% tax applies to all earnings.
Earned Income Tax Credit
The Earned Income Tax Credit will be increased by €200 from €950 to €1,150.
Home Carer Tax Credit
The Home Carer Tax Credit will be increased from €1,100 to €1,200.
Universal Social Charge (USC)
- Exemption threshold remains at €13,000
- 2.5% rate reduced to 2%, threshold for this rate increased from €18,772 to €19,372
- 5% rate reduced by 0.25% to 4.75%
- No change to 8% rate
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%.
PRSI & USC
The Minister outlined his intention to establish a working group in 2018 to carry out a review of the possible integration of PRSI and USC.
National Training Levy
The National Training Levy of 0.7% which is currently collected as part of the employer PRSI contribution will increase to fund further and higher education, the increases are as follows:
- 0.8% in 2018
- 0.9% in 2019
- 1% in 2020
Pay Related Social Insurance (PRSI)
There were no changes to general PRSI thresholds or employee PRSI announced in the Budget. However, as the National Training Levy is increasing and it is collected as part of the employer PRSI contribution, employer PRSI will increase as follows:
- 8.5% increased to 8.6%
- 10.75% increased to 10.85%
Benefit in Kind (BIK) - Electric Cars
A 0% rate of BIK will apply to electric vehicles provided by an employer to an employee in 2018 which is available for private use. Electricity used by the employee in the workplace to charge the car will also be exempt from BIK.
PAYE Modernisation
PAYE Modernisation will be effective from 1st January 2019. Budget 2018 has allocated €50 million for a project to enhance Revenue's IT capacity and to ensure employer compliance.
National Minimum Wage
The National Minimum Wage will increase from €9.25 to €9.55 per hour in respect of hours worked on or after 1st January 2018.
- Workers under age 18 will be entitled to €6.69 per working hour
- Workers in their first year of employment over the age of 18 will be entitled to €7.64 per working hour
- Workers in their second year of employment over the age of 18 will be entitled to €8.60 per working hour
Social Welfare Payments
There will be a €5 increase in all weekly Social Welfare payments with effect from 26th March 2018. The maximum personal rate of Illness Benefit will be increased to €198 per week. Maternity Benefit and Paternity Benefit will be increased to €240 per week.
Oct 2017
10
BrightPay Ireland - Customer Survey - The Results are in!
Opinions and feedback from our customers matter to us. We love to hear comments and suggestions from users in order to improve the customer experience. Last month we conducted a customer survey to get an insight into what customers think about BrightPay and find out what new features our customers want.
The survey also looked at customer satisfaction rates, software performance and customer support. We were delighted to discover that BrightPay has a 99% customer satisfaction rate. Customers are also highly satisfied with our customer support team, with a satisfaction rate of 98%. Many customers agree that BrightPay saves them time (99.5%) and money (99.4%).
The survey also looked at awareness of PAYE Modernisation. 23% of customers were unaware of this upcoming change to the PAYE system, which will be effective from 1st January 2019. BrightPay’s parent company, Thesaurus Software, recently hosted a number of free PAYE Modernisation webinars, with a guest speaker from Revenue. The webinars incorporated everything you need to know about PAYE Modernisation. Watch the PAYE Modernisation training session on demand.
Customer Testimonials
We also received a number of customer testimonials from the survey - all of which will be added to the BrightPay website in due course. Some of our favourite testimonials received include:
- "I am now in my fourth PAYE year since I switched to BrightPay. I wish that I had switched sooner. I would have saved a lot of money without any reduction in the quality of service I provided to my clients, not to mention one or, two enhancements."
- "BrightPay is a very user friendly payroll system. The feature to go back and amend a previous weeks payslip for an individual employee instead of having to go back and amend all employees is a great feature."
- "I am very happy about BrightPay Payroll, easy to setup, easy to use, very good value for money. I've recommended it to a couple of businesses. There is the same story, all happy!"
- "Best payroll software I have used. Very user friendly and the reports that can be compiled are great because they can be tailored depending on what you want in the report. Couldn't say enough good things about it! I recommend it to all the payroll users I know."
- "BrightPay is an excellent product. Quick and efficient to use and they have a helpline that is always available to talk you through a query. I would even recommend this product to someone who has little knowledge of payroll because most of the calculating is programmed in."
- "I tried BrightPay free trial. After the first week I purchased it. It was so easy to use. When I rang support, I was answered straight away, no holding, and my query answered quickly and explained that even I could understand it. Since using BrightPay my payroll is a joy to do, easy and quick."
- "BrightPay is very easy to use for my small business. Without it I would be very worried about making a mistake so it gives me total peace of mind."
- "BrightPay has been the perfect fit for our business - it has reduced our workload and in turn increases productivity within our business."
Prize Winners
As a thank you for taking part in the survey, we are giving away four €50 Amazon vouchers. We are delighted to announce that the winners are:
- John Ganly - Blanchardstown Amalgamated Sports Ltd
- Geraldine Grennan - PJ Grennan Ltd
- Elaine Donnelly - Irish Theatre Institute
- Eugene O'Donovan - SME Finance
The BrightPay team will be in contact with the winners shortly.
We appreciate all the feedback received from this year’s survey and would like to say a massive thank you to everyone who took part.
Useful Links
- What is PAYE Modernisation?
- Revenue moves to PAYE Modernisation / Real Time Reporting
- PAYE Modernisation in BrightPay Payroll
- BrightPay Payroll Software / Thesaurus Payroll Manager
