Irish payroll update. Rose Howley CIPP

Transcription

1 Irish payroll update Rose Howley CIPP

2 PAYE, PRSI and USC - payroll For PAYE tax and PRSI there is an element of earnings that is free of liability Tax: free pay determined by employee s Certificate of Tax Credits and standard rate cut-off point PRSI free pay is pre-determined by the Tax Commissioners each year.

3 PAYE, PRSI, USC and LPT PAYE and USC income tax is usually calculated cumulatively (year-to-date) PRSI and LPT is normally calculated on current earnings in each separate pay period.

4 PAYE/PRSI Non-Payroll 1 January 2004 All benefits-in-kind should be processed via the Payroll 1 January 2005 Small Benefits valued at 500 or less exempt Increased October 2015 No more than 1 per year per employee

5 Tax Credits Annual Values of the Main Tax Credits 2017 Single Person 1,650 Married Persons 3,300 PAYE Credit 1,650 Widowed Person with no children 2,190 New Earned Income Credit for self employed 950

6 What different rates of income tax are there? Basic Rate 20% Higher Rate 40%

7 Standard Rate cut-off points 2017 Single/Widowed person no dependents 33,800 Single/Widowed person with dependents 37,800 Married Couples one income 42,800 Married Couples two incomes 67,600 Plus increase max 24,800

8 Universal Social Charge Employees must earn in excess of 13,000 Employer s pension contributions liable to USC Employees over the age of 70 years with income less than 60,000 Full medical card holder Maximum percentage 3% Various percentages

9 Universal Social Charge Income Thresholds Per Year Income below 12,012 Percentage NIL COP 12, % COP 18, % COP 70,044 5% Excess over 70,044 8%

10 Universal Social Charge Income Thresholds Per Year Per Month Per Week Percentage Income below 12, NIL Up to 12, % On the next 6, % On the next 51,272 4, % Excess over 70,044 5, , %

11 Universal Social Charge USC week 53 Week 1 basis not cumulative Not exempt from charge Voluntary Maintenance Order Legal Maintenance Order o Exempt o Spouse liable to USC on payment.

12 Local Property Tax This is a charge to property owners Value under 1 million o 0.18 percent o Excess 0.25 percent Re-valuation postponed from 2016 to 2019 o Home owners pay on 2013 valuation

13 Emergency process

14 Emergency basis Pay Periods SRCOP Tax Credit Week 1 to Weeks 5 to Week 9 plus 0 0

15 Emergency basis Pay Periods SRCOP Tax Credit Month Month Month 3 plus 0 0

16 Pay related social insurance

17 2016 Budget Changes - Weekly The Class A threshold for charging the 10.75% rate of employer PRSI will increase to 376 Class A and H thresholds changes PRSI credits introduced Tapered down from 12 For earners between and 424 There is no PRSI Credit once gross weekly earnings exceed 424.

18 2016 Budget Changes - Monthly The Class A threshold for charging the 10.75% rate of employer PRSI will increase to 1629 Class A and H thresholds changes PRSI credits introduced Tapered down from 52 For earners between 1525 and 1837 There is no PRSI Credit once gross weekly earnings exceed 1837.

19 Sub-Classes of PRSI Class A Subclass Weekly and Monthly Limits All Income Weekly Monthly pay band How much of weekly/monthly pay Employees Employers AO ,525 All Nil 8.50% AX AL A , , , ,837 More than 424 More than 1,837 All 4.00% 8.50% All 4.00% 10.75% All 4.00% 10.75%

20 EXAMPLE 1 Example Weekly-paid employee An employee s reckonable earnings are; 250 in week in week in week 3 and 510 in week 4. The employee works in the private sector and the contribution class is A. The PRSI contributions are as follows:

21 Determining correct PRSI class Example 1 Weekly-paid employee Wk Earnings Sub class Cumulative Earnings PRSI Calculations Total PRSI AO Employer: % = Employee: 250 0% = * AX Employer: % = Employee: 355 x 4% = PRSI credit = (11.50) ** AL Employer: % = Employee: 400 4% = PRSI credit = (4.00) A Employer: % = Employee:510 4% =

22 EXAMPLE 2 Example Monthly paid employee An employee s reckonable monthly earnings vary each month. However in month 9, they are paid 5,500, Month 10-1,550, Month 11-1,000, Month 12-3,000. The employee works in the private sector and the contribution is Class A.

23 EXAMPLE 2 Example 2 Monthly-paid employee Mth Earnings Sub class Cumulative Earnings PRSI Calculations Total PRSI 9 5, A1 72, Employer: % = Employee: % = * 1, AX 73, Employer: % = Employee: % = PRSI credit = (47.83) , AO 74, Employer: % = Employee: % = , A1 77, Employer: % = Employee: % =

24 Sickness and Maternity Benefits

25 PAYE - Payroll Other forms of income to be considered: Disability Benefit Injury Benefit Maternity Benefit.

26 Sickness Benefit Employees Average Earnings Personal Rate Adult Dependant Child Dependant (Each Child) or more* *Currently an increase for a Qualified Adult may be payable where the spouse/partner has average weekly gross earnings/income of 310 and under.

27 Paternity Leave and Pay 2 weeks paternity leave/pay Children born September 2016 Must be taken within 6 months of childbirth No service test required.

28 National Minimum Wage

29 National Minimum Wage Rates on or after 1 January 2017 Experienced adult worker 9.25 Aged under = 70% First year from date of first employment aged over = 80% Second year from date of first employment aged over = 90%

30 National Minimum Wage 1 st January Employee aged over 18, in structured training during working hours 1st year - one third period 6.94 = 75% 2nd year - one third period 7.40 = 80% 3rd year - one third period 8.33 = 90%

31 Pay As You Earn Modernisation

32 Pay As You Earn Modernisation Real time PAYE reporting Timeline for implementation 30 th June 2017 employers submission data requirements published 1st March 2018 test facility introduced (9 months) 1st January 2019 is the launch date Issues Identified Increased administration burden for employers Information technology issues Operation and correction of Payroll

33 Irish Payroll Update 2017 Thank you