New legislation around the disclosure of specific expenses and benefits made to employees and directors is now in place in Ireland. Employers making the below payments/allowances to their employees have a legal obligation to give advance notice to the Irish Revenue authorities about any plans to make these payments.
From 1 January 2024, employers will be required to report to the Revenue on these 3 types of payments as part of this new Enhanced Reporting Requirement (ERR).
- Travel and subsistence payments.
- Small benefits falling under the Small Benefit Exemption.
- Remote working daily allowance of €3.20.
The objective of this new initiative is to provide the Revenue Commissioners in Ireland with additional detail on specific expenses and benefits provided to employees and directors. This will help to create greater transparency to employees around non-taxable payments.
Reporting Technology Tools Needed
Crucially, the reporting must happen on a real-time basis. This means it is essential that global employers have access to detailed and comprehensive payroll related reporting tools. They need to be able to drill down into specific pay elements such as benefits, expenses, bonus payments and country specific nuances like ERR.
An innovative global payroll technology stack is needed to ensure the data they need to meet their legal and statutory obligations, can be extracted and reported on in a smart and efficient way.
The Enhanced Reporting Requirement (ERR) in Ireland mandates that this reporting must be done in real-time, and the information should be submitted on or before the date of payment using the Revenue Online Service (ROS). The reporting must cover both the amounts and dates of payment for these types of benefits.
Be prepared
Multinational companies operating in Ireland now need a clear line of sight of these specific expenses and benefits in order to meet their reporting obligations to the tax authorities in Ireland. Regulation documentation is still being drafted by the revenue authorities in Ireland, but they have confirmed that they will not be applying penalties for non-compliance with ERR until 30 June 2024. This is welcome news as it will give employers in Ireland time to ensure that they have a process in place to meet these new reporting requirements on these specific pay elements. The Revenue has stated that it will be available to provide support to employers making efforts to comply with ERR.
Running your global payroll operations from a global payroll control platform that features innovative reporting tools is always a good idea. There are many local and regional payroll related disclosure obligations that require in depth and specific reporting. A sample of the reports that a finance team can run instantly and in a self-serve capacity on Payslip include:
- Employer Cost
- General Ledger
- Trends and Variances
- Country Cost Comparisons
- Headcount by Country
- Change Log
- Forecasting by Pay Element
For ERR, it is advisable that companies look at how these payments are currently categorised and reported on. Identify if you have the reporting tools in place to meet the obligations arising out of this new legislation and if you are capable of delivering the kind of timely and accurate reporting that will ensure you remain compliant.
It is also important to examine if you have the necessary controls in place to track any non-cash benefits provided to employees. In terms of open transparency with employees, it is a good idea that employers choose to make them aware of the information that they now have a legal obligation to report to the revenue.
Further Considerations
In addition to the ERR requirements , the Irish Revenue have moved the reporting of Option Share Gains from Individual self-assessment over to a PAYE real-time payroll reporting obligation. This shifts the responsibility to the employer who now needs to track and record data for share option gains as a monthly reporting requirement. This new employer PAYE reporting requirement comes into effect from 1 January 2024.
Similar to the ERR requirements, accurate and real-time visibility into your payroll elements will avoid unnecessary reporting enforcement and penalties. The suite of detailed reporting tools on our global payroll control platform can assist when drilling down into specific payroll data elements such as share options.