07 March 2017 - Blog, News
UK vs Irish Payroll – 8 key differences between UK and Ireland Payroll | PaycheckPlus Payroll Specialists

UK Vs Irish Payroll

Payroll can be a complex and time consuming task for companies, especially if they are multinational companies. Each country has their legislations and specific requirements that companies must adhere to if they are to be payroll compliant. To give you a brief overview of the complexity and varying requirements, we have highlighted 8 key differences between UK and Ireland payroll.

UK vs Irish Payroll | PaycheckPlus Payroll Specialists

8 key differences between UK and Irish Payroll

IrelandUK
Tax yearTax year begins on 1st January each year and ends on 31st of DecemberTax year begins on 6th April each year and ends on 5th April of the following year
Place of Establishment / Registering as EmployerAny employer who makes payments exceeding a rate of €8 per week in the case of a full-time employee or €2 per week where the employee has other employment must register with Revenue for PAYE purposes.

Any company employing an individual resident and working in Ireland is obliged to register as an employer with Revenue even if they do not have a place of establishment in the state.

Typically a non-resident company cannot set up a standard (PAYE) payroll scheme until it has a business premises in the UK. However there are certain exceptions.

The employer is responsible for calculation and submission or employer and employee National Insurance even when they do not have a place of establishment in the UK.

Filing DetailsUsually Monthly P30 statement of the total liability for PAYE, PRSI, USC & LPT should be submitted to Revenue by the 23rd of the following month with payment for that period.

At the end of the Tax Year, the employer must prepare and submit the Annual P35 with details of each individual employed during the year including Gross Pay, PAYE, PRSI, USC, LPT, Illness Benefit and BIK on Healthcare.

The employee is entitled to receive a P60 annual statement with details of their earnings for that year.

RTI – Real Time Information

All employers are required by law to submit an RTI return every time employees are paid either on or before payday.  This is like a P35 being submitted weekly, fortnightly or monthly by UK employers.

Full Payment Submission:  The FPS contains a breakdown of the payments and deductions on the payroll for each person paid covering over 150 items for each person. Deadline for submission to HMRC is on or before each & every payday.

Employer Payment Summary: The EPS contains any adjustments to payments such as the recovery of statutory payments and details of the employer’s PAYE and NIC liability for the relevant pay period.  Deadline for submission to HMRC is 19th of the month.

Holiday/Public HolidaysFull-time employees are entitled to 4 weeks paid holiday entitlement as a minimum. Part-time employees receive the same entitlements pro-rata.

Depending on the time worked, an employee’s minimum holiday entitlement s should be calculated by one of 3 methods.

There are 9 Public Holidays in addition to holidays.  A full time employee is entitled to one of three options for these days.  To determine the relevant payment entitlement, different rules apply to people who are required to work on the public holiday and to part-time employees, depending on their ‘normal’ working hours/days and on the number of hours worked in the weeks leading up to the Public Holiday.

Most workers who work a 5-day week must receive 28 days’ paid annual leave per year. This is calculated by multiplying a normal week (5 days) by the annual entitlement of 5.6 weeks.

Part-time workers are also entitled to a minimum of 5.6 weeks of paid holiday each year, although this may amount to fewer actual days of paid holiday than a full-time worker would get. For example; a worker works 3 days a week. Their leave is calculated by multiplying 3 by 5.6 which comes to 16.8 days of annual paid leave.

An employer can choose to include bank holidays as part of a worker’s statutory annual leave.

Benefits in Kind

A Benefit in Kind (BIK) exists when an employee receives a benefit from an employer in a form other than a monetary payment. The term “notional pay” is used to describe the value of a BIK.

 

The majority of BIKs are liable to PAYE, PRSI (including employer PRSI) and USC however certain benefits are exempt.

Where an employee receives a BIK from his employer, the employer is responsible for identifying, calculating and collecting the liabilities due on the notional value of the benefit through the payroll system.

Taxable value of the car is based on Original Market Value of the car and business mileage.

 

Some benefits in kind will not be taxed while others may be subject to tax and National Insurance.

There are different rules for reporting and payment depending on the type of benefit or expense provided. HMRC are introducing “payrolling for some benefits”.

Where an employer provides company cars or fuel for employee’s private use the taxable value must be calculated and reported to HMRC.

Taxable value of the car depends on such things as car’s fuel type and level of CO2 emissions.

P11D Returns must be submitted annually with details of Benefits provided for each employee.

PensionsWhere an employee is not eligible to join a company pension scheme within 6 months of commencing employment, an employer must provide access to a standard Personal Retirement Saving Account (PRSA).

PRSA contributions due for the PRSA provider must be paid by an employer by the 21st of the month, after the month in which they were deducted.

From 2012 all qualifying employees must be automatically enrolled into a pension scheme by their employer.

Employees can choose to opt out of the scheme but they must be automatically re-enrolled three years later.

From April 2017 even the smallest employers should have been given their staging dates.

Payment of statutory maternity leaveLeave

Statutory maternity leave consists of 26 consecutive weeks leave and an optional 16 weeks additional maternity leave.

Pay

An employee is not entitled to be paid by her employer while absent on maternity leave unless this is included in the employee’s terms and conditions of employment. However an employee may qualify for maternity benefit during the 26 weeks of statutory maternity leave from the department of social protection if she has sufficient PRSI contributions.

The Department of Social & Family Affairs will issue payment subject to eligibility.

Leave

Eligible employees can take up to 52 weeks’ maternity leave. The first 26 weeks is known as ‘Ordinary Maternity Leave’, the last 26 weeks as ‘Additional Maternity Leave’.

Pay

Statutory Maternity Pay for eligible employees can be paid for up to 39 weeks, usually as follows:

  • the first 6 weeks: 90% of their average weekly earnings (AWE) before tax
  • the remaining 33 weeks: £139.58 or 90% of their AWE (whichever is lower)

Tax and National Insurance need to be deducted.

The employer issues payment to the employee and may claim a reduction from HMRC.

Payment of statutory paternity leaveLeave

The Paternity Leave and Benefit Act 2016 provides for statutory paternity leave of 2 weeks for births and adoptions. Paternity leave can start at any time within the first 6 months following the birth or adoption placement.

Pay

Employers are not obliged to pay paternity leave. Entitlement to pay and superannuation during paternity leave depends on the terms of the contract of employment.

Leave

Employees can choose to take either one week or two consecutive weeks leave.

Pay

If an employee qualifies, then Statutory Paternity Pay is payable for up to 2 consecutive weeks.

The statutory weekly rate of Paternity Pay is £139.58, or 90% of the average weekly earnings (whichever is lower).

If you have employees in Ireland or the UK, PaycheckPlus can provide our award winning UK and Irish payroll services. Our CIPP and IPASS qualified staff will complete registrations, salary calculations, payment of taxes and filing of requisite tax returns etc.

Please don’t hesitate to contact us at 353 (0)41 989 2100

PaycheckPlus – Payroll Outsource Provider

Payroll compliance requirements change from country to country and are regularly updated within each country. It’s imperative that companies stay up to date and be compliant with the legislations in the countries that their staff are employed. Companies can incur severe penalties if they are not compliant but being compliant can be difficult for companies and staff that don’t have payroll as a core focus. However, here at PaycheckPlus we specialise in payroll and provide payroll solutions tailored to the specific needs of businesses. We provide managed payroll, auditing, consultancy, payroll workshops and many other services that can ensure payroll compliance. We also provide a cover service for payroll staff which gives companies (and payroll staff) peace of mind that their employees will still get paid even if their payroll team becomes ill or goes on leave.

To ensure payroll accuracy and for expert support contact PaycheckPlus today.

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For information and assistance on processing payroll for employees, call +353 (0)41 98 92 100 or Request a callback from our Payroll Team today.

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