Important Notice to Employers and Pension Providers
2016 Employer Tax Credit Certificates (P2Cs)
In December 2015, Revenue will issue 2016 P2Cs to employers/pension providers for all employees/pensioners, advising the rates and thresholds applicable from 1st January 2016.
Revenue is requesting that employers/pension providers, where possible, hold back running 2016 payrolls until they receive the 2016 P2Cs.
In the situation where an employer/pension provider has not received 2016 P2Cs in time to run January 2016 payroll(s), employers/pension providers should continue to use the 2015 P2Cs for tax deductions and follow the instruction in 4.33 of the USC Frequently Asked Questions (FAQ) document on the Revenue website.
Employers should take care when uploading the 2016 P2C data not to upload it to 2015 payroll in error.
Note: the ROS mail notification about the 2016 P2Cs will explicitly reference that they are 2016 P2Cs.
Universal Social Charge (USC)
As announced in Budget 2016 the rates, thresholds and exemption limit of the USC are changing with effect from 1st January 2016.
The USC FAQ document on the Revenue website has been updated to take account of these changes. Employers/pension providers are urged to familiarise themselves with the contents of this document which is updated on an ongoing basis.
USC Exemption on P2Cs
Where Revenue determine (generally based on previous year's earnings) that the employee's/pensioner's total annual earnings (from all USC-able sources) will not exceed the USC exemption threshold of €13,000, the USC exemption will be stated on the P2C. However, where an employer knows that an employee's/pensioner's pay for USC purposes will in fact exceed the €13,000 threshold, we would ask that the employer/pension provider advise the employee/pensioner to contact their Revenue office to have a revised Tax Credit Certificate (P2C) issued. This will avoid a situation where the employee/pensioner has an under-deduction of USC at the end of the year.
Revenue have instructed employers that all taxable Illness Benefit and Occupational Injury Benefit payments paid to PAYE employees by the Department of Social Protection (DSP) are to be included with taxable pay.
The Employer's Guide to PAYE on the Revenue website has been updated to include instructions regarding how Illness Benefit payments, payable by DSP in December, are to be treated in payroll.
P35 Filing: update regarding issues that may need to be regularised before year-end
(i) Correct PPSN
Employers are reminded to ensure that the correct PPSN is used for their employees/pensioners. All employers/pension providers should have a P2C with the correct PPSN for all their employees/pensioners; and that PPSN should be subsequently used in completing the P35L detail. Issues have arisen when, for example, an employee/pensioner changes from a 'W' number and has a new PPSN issued by the DSP and Revenue issue a new P2C under the new number. The employee's/pensioner's PPSN should be recorded on the P35L under the correct (new) PPSN. Where an employer continues to use a cancelled or incorrect PPSN on the P35L, this will cause delay in updating the individual employee's pay and PRSI information to the DSP.
(ii) Local Property Tax (LPT)
Employers/pension providers are reminded to ensure that LPT is correctly deducted where instructed to do so by Revenue, and subsequently included on the P35L. Updated P2Cs containing instructions about LPT deductions are issued by Revenue during the year, generally based on a customer's instructions to Revenue. Accordingly, it is important that the latest P2C instruction relating to LPT deductions is used.
Changes to P35 and P60 forms for 2016
The 2016 Forms P35L, P35LT and P60 will be revised to include a new 'Pay Frequency at 31st December' field.
Changes to PRSI (Queries regarding these PRSI changes should be directed to the DSP)
The following changes to PRSI will take effect from 1st January 2016:
(i) Employer PRSI
The Class A threshold for charging the 10.75% rate of employer PRSI will increase from €356 to €376.
(ii) Class A Employee PRSI
The Class A employee PRSI rate of 4% remains unchanged.
(iii) PRSI Credit
For gross earnings between €352.01 and €424, the amount of the PRSI charged at 4% is reduced by a new tapered weekly PRSI Credit. The maximum weekly PRSI Credit of €12.00 applies at gross weekly earnings of €352.01. For gross weekly earnings over €352.01, the maximum weekly PRSI Credit of €12.00 is reduced by one-sixth of weekly earnings in excess of €352.01. There is no PRSI Credit once gross weekly earnings exceed €424.
Further details are available on the DSP website.
ROS Login Changes
This is a structured online contact facility, which was launched in June 2015 and replaced Secure eMail. It allows customers to securely send enquiries to Revenue and to receive responses to those enquiries. Business customers can access MyEnquiries through ROS. Further information is available on the Revenue website.
The Employer Customer Service Unit provides information and support to employers.
Contact details as follows:
|Telephone||1890 25 45 65 (+ 353 1 7023014 if ringing from outside the Republic of Ireland)|
For more information call +353 (0)41 68 63 000 or Request a callback from our Payroll Team today.
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