May 2015
21
Accrual of holidays during periods of long-term illness
Currently employees working in the private sector are not entitled to build up holidays whilst on sick leave - it is up to the discretion of the employer.
Under new laws about to take effect, private sector employees on long-term sick leave WILL be entitled to accrue annual leave.
The rule relating to the holiday accrual is contained within the Workplace Relations Bill, which makes sweeping changes and reforms to Irish Employment law. The new law will mean that employees will now be entitled to accrue holiday leave while off sick. (though they will have to use the holiday days within 15 months of accruing them.)
Traditionally in Ireland, by virtue of the Organisation of Working Time Act 1997, employees in Ireland don’t accrue annual leave in such circumstances. However, recent key decisions in the Court of Justice of the European Union (CJEU) have meant that the Irish approach was out of sync with European requirements. Minister of State for Business and Employment, Gerald Nash opened up discussions on including these amendments in the Workplace Relations Bill.
The Workplace Relations Bill has now passed both Houses of the Oireachtas and will be signed into law by the President in the coming weeks, with a commencement date of July 1st looking likely. However the holiday provisions will be commenced immediately following the signing by the President.
Apr 2015
26
FRIDAY 1ST MAY 2015 – SEPA PAYMENT PROCESSING RESTRICTIONS
The Banking & Payments Federation Ireland (BPFI) has issued a customer payments notice in light of Friday 1st May 2015 being a European Bank Holiday.
Friday 1st May 2015 is a European Bank Holiday; the Euro payments clearing and settlement system will be closed. Although Irish banks are open for business on the 1st May 2015 it is not possible to exchange payments with other banks. In addition Monday 4th May 2015 is a bank holiday in Ireland. SEPA Credit Transfer Bulk Files submitted with a debit date of Thursday 30th April 2015 or Friday 1st May 2015 may not be with the beneficiary bank until Tuesday 5th May 2015.
Employers due to pay wages on Friday 1st May 2015 may wish to submit their payments early to ensure beneficiary accounts are updated (credited) on Thursday 30th April 2015.
For further details on Euro payments processing over that weekend please check with your own bank.
Mar 2015
24
Free business event for SMEs in the South East - Taking Care of Business
After previous successful events, Revenue is participating in another free one-stop-shop event for SMEs, “Taking Care of Business”. If you own or manage a small business, or are thinking of starting your own business, you should visit www.takingcareofbusiness.ie to register as places are limited.
This is an initiative organized by the Department of Jobs, Enterprise & Innovation.
The events have been designed to help small and start-up businesses understand and benefit from the services provided by a range of State Bodies.
Attendees will:
• Meet with representatives from a number of State Offices & Agencies
• Get information & advice on running your business
• Find out ways to save your business money
• Receive support to help you in your business
This half-day event will take place on Thursday, 30th April in the Tower Hotel, Waterford.
To find out more please visit www.takingcareofbusiness.ie
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
25
Irish Employer’s Responsibilities - Payment of Wages Act
The Payment of Wages Act 1991 gives all employees the right to a payslip which shows the gross wages and the details of all deductions. A payslip is essentially a statement in writing from the employer to the employee that outlines the total pay before tax and the details of any deductions from pay. Payslips can be provided in electronic/hard copy format.
Deductions from employees’ pay are allowed when:
• It is required by law i.e. Income Tax, Universal Social Charge (USC) & PRSI
• Provided for in the contract of employment e.g. pension contributions
• Employee has given written consent e.g. trade union subscriptions
• They are to recover an overpayment of wages or expenses
• They are required by a court order e.g. attachment of earnings order
• They arise due to employee being on strike
Where a loss is suffered e.g. employee breakages, till shortages deduction is only allowed where:
• It is allowed for in the employee’s contract of employment
• It is fair and reasonable
• Employee has received written notice
• The amount of the deduction does not exceed the loss or the cost of the service
• The deduction takes place within 6 months of the loss/cost occurring
Failure to pay all or part of the wages due to an employee is considered to be an unlawful deduction and a complaint can be made under the Payment of Wages Act 1991.
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.
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.
Nov 2014
5
Local Property Tax 2015 - Ireland
The third year of LPT is fast approaching!!! Revenue will be writing to the majority of homeowners shortly, the letters will give homeowners the opportunity to decide how and when they would like to pay their LPT. The letter will include the Property ID and PIN and will also confirm the amount due for 2015. If you wish to avail of a phased payment option such as Direct Debit/Deduction at Source you should confirm your payment method by the 25th November 2014 to allow sufficient time for the payment method to be in place for the beginning of the year.
Revenue will not be writing to homeowners already paying LPT through deduction at source or by direct debit instead their payment method will continue in 2015.
A number of Local Authorities have reduced the rate of LPT for 2015; Revenue will automatically make those deductions. Homeowners can confirm the amount of LPT due for 2015 on their property by accessing their LPT record online using their PPS Number, Property ID and PIN.
Key Dates for 2015:
• 7th January 2015 – Deadline for paying in full by cash, cheque, postal order, credit card or debit card
• January 2015 – Phased payments by Deduction at Source and regular cash payments through a Payment Service Provider to commence in January
• 15th January 2015 – Monthly Direct Debit payments commence and will continue on the 15th of each month thereafter
• 21st March 2015 – Single Debit Authority payment deducted
If you are the liable person for the residential property on 1st November 2014 you have to pay LPT for 2015 even if it is sold before the end of 2014.
Full details can be found on Revenue’s website www.revenue.ie
Oct 2014
23
Breakfast with Bright Contracts
Thesaurus Software had an interesting morning yesterday as we had our first Employment Law breakfast meeting. We met with a number of our customers at the Pillo Hotel in Ashbourne for a two hour employment law seminar.
The morning had a particular emphasis on our HR software Bright Contracts and the importance of having employment contracts and employee handbooks in the workplace. The topics under discussion throughout the morning included:
• Managing sick leave
• How to handle workplace theft
• Employee dismissal - what you need to know
• Employment law update: The Whistleblowing Bill and The Workplace Relations Bill
We were delighted with the turnout for the event and really enjoyed meeting our customers and answering their queries. With the morning being a great success, we are starting to plan more breakfast meetings in various locations across Ireland.
