Payroll Procedures and PAYE Modernisation
Payroll Procedures for Contractors Using an Umbrella Company in 2019 Tax Year and PAYE Modernisation
From the 1st January 2019 Revenue are changing the way they will accept payroll returns and tax payments. PAYE Modernisation aims to modernise the reporting of tax deductions to the Revenue Commissioners by a new real time reporting regime.
From 01/01/2019 tax deductions, including PRSI and USC, must be communicated to Revenue in real time for each pay period.
If you are a contractor under an umbrella company, you must take action and follow the steps below:
1. If you are a contractor under an umbrella company, you must take action and follow the steps below:
2. Check and Review your tax credits
How to set up your Revenue account:
Revenue requires everyone to set up an online Revenue account. If you do not have an online Revenue account, you must register one before January 2019.
Simply follow the link here: Register
Once you have set up your Revenue online account you can then review your tax credits.
If you have difficulties setting up your account, please contact us.
Please note that it is not possible for Mac Accountancy Services to set up online Revenue Accounts on behalf of our contractors.
We suggest that everyone submits a timesheet/invoice and expenses by the last working day of the month so that we can process payslips for you.
Forms P45, P46, P35 and P60 abolished
These forms will all be abolished in 2019. Instead, all of the functions normally associated with these forms will be accommodated by the payroll program.
In our case, we use Thesaurus. This program has been deemed compliant for reporting purposes by Revenue.
How does PAYE Modernisation work?
When we make a salary payment to a contractor, Mac Accountancy Services must inform Revenue of your pre-tax income, tax, PRSI and USC due to be paid.
We do this using Revenue On-Line Service (ROS). Revenue will then inform MAC of the amount of tax, PRSI and USC to be paid.
What happens if Revenue have incorrect tax credits or earnings to date if you start after the 1st January?
you have provided Revenue with correct information regarding your tax credits, then the PAYE modernisation system will work correctly. If your tax credits or pay to date are incorrect, you must inform Revenue of this immediately. It is important therefore to check your tax credits and tax bands frequently.
It is not possible to amend your payslip in the current pay period once Revenue have issued the tax details. It is the responsibility of the Umbrella company to remit tax deductions that Revenue have instructed. However, discrepancies can be resolved in the next payslip.
You can still claim business expenses. Your business expenses must be submitted prior to your payroll being processed. It will not be possible to adjust your payslip for additional expenses once the payslip has been processed. These additional expenses will have to be accommodated in the next payroll period.
What happens if I leave the umbrella company?
When you inform MAC that you are leaving the umbrella company and your last payment has been processed we will inform Revenue that you have ceased with us. Revenue will update their system with this real time information. You will no longer receive a P45. So, it is imperative that you have your online Revenue MyAccount set up with Revenue and ensure your tax credits are correct.
If you require any additional information please contact us: