A standard flat rate expenses allowance (deduction) against tax is set by Revenue for various classes of employees. [Read more…]
JobsPlus is an innovative incentive for employers which was introduced by the Department of Social Protection from July 1st 2013.
The aim of the scheme is to reward employers who provide full-time employment opportunities to people who have been unemployed for more than 12 months.
There are 2 levels of payment: [Read more…]
PRSI Earning Bands
Employers should be aware of an anomaly caused by the earnings thresholds on PRSI Class A contributions.
Class A is the most common PRSI class and covers employees under the age of 66 in industrial, commercial and service-type employment who have reckonable pay of €38 or more per week from all employments as well as Public Servants recruited from 6th April 1995. The earnings bands operate as follows:
The anomalies arise where employees cross the €352 and €356 weekly pay bands. This is because when the weekly pay bands are exceeded, the higher contribution rates apply on all pay not just the amount in excess of the weekly pay band. It should also be noted that contributions are calculated on a week by week and not on a cumulative basis.
The following table illustrates the problem:
So an increase in gross pay from €352 to €355 means an employee is significantly worse off because they now pay 4% Employee PRSI on the full €355 and not just the amount over €352.
Similarly, when gross pay increases from €355 to €357, the Employer PRSI contribution jumps from 8.5% to 10.75%, again on the full €357 and not just the amount over €356.
Where an employer has a number of employees in these earning brackets, particular attention should be paid to ensure that neither employees nor the employer are disadvantaged by these anomalies. This can be achieved by careful rostering of employee hours.
If you require further information, why not contact us.
The Revenue Commissioners have recently issued a reminder to employers and pension providers of their obligations in relation to deduction at source (DAS) of Local Property Tax (LPT) from wages, salary or an occupational pension.
Employers and pension providers are obliged to collect and account for LPT on behalf of employees when instructed to do so by Revenue. The instruction is issued by means of an Employers’ Tax Credit Certificate (Form P2C) and the employer or pension provider must implement the instruction through their payroll system and return the LPT through their P30 and P35 returns.
Where an employer or pension provider has received such a P2C notification for an employee or pension recipient for the 2013 LPT tax year but failed to implement the instruction, the employer or pension provider should immediately rectify the situation by filing amended P35 and P35L returns and paying any balance outstanding.
Where a P2C instruction was received but the employee or pension recipient had ceased before the instruction could be implemented, then the employer or pension provider should have filed a P45 in the normal way. Where for any reason, an employee or pension recipient did not receive payments after receipt of the P2C instruction (e.g. an employee who is a long-term absentee from the employment), then the employer or pension provider should notify Revenue of this fact. This notification should be sent to Revenue at LPT Branch, P.O. Box 1, Limerick or emailed to email@example.com
For the 2014 tax year, P2C instructions are continuing to issue in relation to LPT for 2014 and arrears of 2012 Household Charge (HHC). These amounts should be deducted in equal amounts over the remainder of the tax year.
Non-operation of instructions and failure to pay over LPT as instructed renders the employer or pension provider liable for the amount due and may result in interest charges, penalties and refusal of a tax clearance certificate. It also increases the chances of a tax audit.
It is advisable therefore to ensure that P45s have been issued where employees or pension recipients have ceased and that Revenue is notified immediately of any difficulties in collection of LPT for the remainder of the tax year.
If you require further information, why not contact us.
REGISTER OF EMPLOYEES
The Revenue Commissioners have recently issued a reminder to employers outlining that under PAYE Regulation 8, an employer has a statutory obligation to keep and maintain a Register of Employees.
This register must include past and present employees, can be in paper or electronic format and must contain the following relevant information:
- Name, Address and PPS number of each employee
- Date of Commencement
- Date of cessation of employment where relevant
The Register (or a copy of it) must be kept either at the normal place of employment of each employee or at the employer’s main place of business.
Even if an employer has their payroll processed by a third party or uses payroll and human resources software, the onus is on that employer to keep and maintain the Register of Employees at the normal place of employment of each employee or at the employer’s main place of business.
The penalties for failing to keep and maintain a Register of Employees are quite severe. Section 987 of the Taxes Consolidation Act 1997 provides for a penalty of €4,000. Where the offending employer is a company, the secretary of that company is liable to an additional penalty of €3,000.
If you require further information, why not contact us…
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