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PAYE Modernisation

October 25, 2018

Revenue states that “The PAYE Modernisation Project will involve the most significant reform of the PAYE system since its introduction in 1960. Employers will need to calculate and report their employees’ pay and deductions as they are being paid.”

The redesign of the PAYE system will be effective from 1st January 2019 and it will introduce significant changes to how and when a business sends and communicates PAYE information to Revenue.


What will it involve?
PAYE Modernisation will involve an “Employer Submission” to Revenue each time an employee is paid. The Employer Submission will contain information similar to that which currently appears on an employer’s P35 return. P30s, P35s and P45s will be abolished with employers submitting this information to Revenue electronically in the Employer Submission

It is envisaged that the workload for employers using payroll software will not increase as the majority of payroll software products should be capable of communicating electronically with Revenue however, for smaller employers where manual processes are used, Revenue does recognise that PAYE Modernisation will increase the administrative burden on employers. If you are using a manual system, there will be no facility to directly submit your PAYE reports through to Revenue.

The modernisation of PAYE is to some extent a move to a more automated method of payroll and employers are being encouraged to consider using payroll software to be used in conjunction with Revenues own API (Application Programme Interface) which allows payroll software providers to fully integrate with Revenue’s reporting system.


What are the benefits?

PAYE modernisation benefits - PAYE Modernisation


What do Members need to do to get ready for PAYE Modernisation?
Revenue has commenced its awareness campaign for PAYE Modernisation by releasing and updating information via their website.


What happens if I do nothing?
While Revenue will take a practical approach when it comes to the application of penalties on the introduction of PAYE Modernisation, non-compliant employers can expect Revenue Intervention.


What are ECI doing?

  • Exploring Affinities with payroll software providers
  • Continue to advise and guide members through Support Point
  • Continue to update members as deadline approaches


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