PAYE NOTICE TO EMPLOYERS
Tax treatment and reporting of Illness Benefit paid by the Department of Social Protection (DSP)
Employers are reminded that with effect from 1 January 2012, all taxable Illness Benefit is to be included with earnings. The option to reduce Tax Credits and Cut-Off Points no longer applies. Full instructions can be found in the Employer’s Guide to PAYE. Illness Benefit continues to be exempt from USC and PRSI.
Universal Social Charge (USC)
With effect from 1 January 2012, the deduction of USC changed to a cumulative basis, similar to the manner in which PAYE is deducted. Employers are urged to familiarise themselves with the contents of the USC Frequently Asked Questions (FAQ) document which is updated on an ongoing basis. www.revenue.ie/en/tax/usc/universal-social-charge-faqs.pdf
USC where additional pay period(s) (week 53) occurs
Unlike PAYE, there are no additional thresholds granted in Week 53. Where the employee/ pensioner has used up all of their USC Cut-Off Points at cumulative Week 52, they will have no unused Cut-Off Points left to set against their Week 53 pay, and will therefore pay USC at the highest rate stated on the P2C on all their Week 53 pay. See FAQ 4.26 in the USC FAQ document.
USC Exemption on P2Cs
Where Revenue determine that the employee/pensioner’s total annual earnings (from all USC-able sources) will not exceed the USC exemption threshold of €10,036, the USC exemption will be stated on the P2C. However, where an employer determines that a USC-exempted employee/ pensioner’s pay for USC purposes will in fact exceed the €10,036 threshold, in order to avoid a situation where the employee/pensioner has an under deduction of USC at the end of the year, we would ask that the employer/ pension provider advise the employee/pensioner to contact their local Revenue office to have a revised Tax Credit Certificate issued.
Obligation to keep a Register of Employees
Employers are advised that under the Income Tax (Employments) Regulations 2012, which came into force on the 18th July 2012, all employers are required to keep a Register of Employees (in paper or electronic format) (Regulation 8) showing the name, address, Personal Public Service number and date of commencement/cessation of all employees. Employers are reminded that they must notify the name and address of all employees to Revenue within 9 days (Regulation 7).
Employer Customer Service Unit
provides information and support to employers.
Contact details as follows:
Telephone: 1890 25 45 65 (+ 353 67 63400 if ringing from outside the Republic of Ireland)