In January, new rules came into effect regarding how employers report payments to their employees to Revenue. Now every time you make a payment you have full visibility of your obligations to employees, casual or fulltime, regarding income tax and PRSI.

IFA farm business chairman Martin Stapleton has called on Revenue to be fair and understanding as the new rules bed in over the coming months.

“There will be teething problems but in the long-term I’m confident the changes will be for the better.

1 Why change the system from the way it was? The old system dates from the 1960s when people usually had only one job and one employer. That’s all changed and as people can have several jobs and different employers, a new system was required.

Under the previous system, employers were required to submit P30s each month and file a P35 return at year end. Analysis showed that some employers used the end-of-year return P35 to make ammendments, which was not correct. Now there will be no end-of-year process. Employment legislation requires that you must notify Revenue on or before you pay your employees.

All employers should use the latest available RPNs (Revenue Payroll Notification) for calculating all employees’ deductions, which will ensure there will be no additional PREM (employer PRSI/PAYE) liabilities. Employers should not operate net-pay arrangements to avoid exposure to additional liabilities and possible interest and penalties.

2 Why do all employees have to be paid on the same day every month? All employees do not have to be paid on the same day. Once the payments are reported on or before the payments are made, there is no requirement to change the pay dates.

3 Why does our accountant have to wait to hear back from Revenue every month as to an employee’s wages and then notify me? Before this, the accountant gave me the wages when they started and I paid them monthly and did not have to wait to hear back from the accountant. The accountant does not have to wait to hear from Revenue before calculating payroll. However, they must ensure that they are using the latest RPN to calculate the correct deductions. Previously, some employers were not applying the correct P2C, which led to incorrect payments. The latest RPNs are available in real-time so there will be no delay.

4 Have the rules around casual labour changed? Such as those who do occasional relief milking or help with silage making. Casual workers are not treated any differently to full-time employees. Nor for that matter are seasonal workers or family members. All employees must be registered with Revenue. You will then receive their tax credits and rate bands on the latest RPN, which will allow the correct calculation of payroll. This applies to all sectors and not just to farmers.

5 Our accountant is only allowed to submit one payment per month from the employer to Revenue. We have to do the returns to revenue on the same date for all our employees. Why is this? Under PAYE modernisation, payment dates for employers remain the same, eg monthly, quarterly. However, all payments to employees must be reported to Revenue on or before the payment date.

6 The fine for a first offence is a whopping €4,000. Is there a grace period before this will come into effect? Penalties of €4,000 can be applied when employers do not meet their PREM obligations. However, Revenue will take a sensible approach to employers who genuinely attempt to meet their obligations.

7 When registering for an Employers Registration Number I found the tax type options confusing as I am not fluent in what the abbreviations stand for. Where can I get more information? Check out Revenue’s website www.revenue.ie. Under the tab “Employing People” there is a guide as to how to register

8 Has anything changed regarding employing a family member, a son or daughter? Nothing has changed regarding the treatment of family members. Whether a family member works part-time or full-time, the payments to that family member must be reported to Revenue on or before the payment dates, regardless of the payment frequency.

If there is no other employment on record then all tax credits will be allocated to the employment on the farm. If the family member has other employments, they can divide their credits between employments if they so wish.

9 Could there be a casual labour option included? No. All employees are treated the same way under the PAYE system, whether they are full-time, part-time or casual employees. Payments to casual employees should be reported on or before the payment date. If there is no payment made to a casual employee, there is no need to report this.

10 Do we have to get PPS numbers from anyone we take on as casual labour for milking, silage making? Yes, PPS numbers are required for all employees and RPNs should be requested for all employees. This will ensure the employees are registered on Revenue’s system.

11 The system asked me for an employer’s registration number which I discovered was my PPS number. Could this number be called PPS throughout? No. An Employer’s Registration Number (ERN) is not always the same as a person’s PPS number. An employer should be aware of which is the correct number to use.

12 What’s the story about payslips? Under employment legislation there’s long been an obligation to provide an employee with a payslip. In the event of an audit, the National Employment Rights Authority (NERA) has the power to impose fines where payslips have not been issued.

13 What is the situation when it comes to farmers who are faced with sudden health issues or accidents. If they need to take on someone straight away but are not in a position to inform Revenue, what do they do? If an employee is to be paid while the employer is incapacitated then someone must be assigned to inform Revenue. Revenue will take mitigating circumstances into consideration.

14 What happens if you don’t have access to wifi over a weekend and you can’t call Revenue about a payment that’s going to be made to an employee? Employers should make adequate provisions to ensure that they can make payroll submissions in a timely manner.

Legislation does allow for persistent technological failure, eg Storm Ophelia etc. However, if there is a power outage, employers should be able to provide evidence of this.

15 The new system means a lot more contact between accountants and farmers and that costs money? That’s a matter between you and your accountant.

16 An employer may not want to commit to a week’s work for someone who is on trial. You may not want to keep them on and for that matter they might not turn up for the five days. What happens in this situation? It doesn’t matter if an employee works a half day, full day or full week. An employer is only required to report what is paid to an employee.

17 Our accountant is looking for the number of hours worked for the month before the month is over. Why is that? This is a matter between the employer and the accountant.

Thanks to Sinead Sweeney of Revenue for her assistance. Officials from Revenue are available to visit farm groups if asked.