PAYE Modernisation is the modification of the PAYE system which came into being with effect from 1st January 2019. It means every time a business runs payroll, it will be required to submit pay, tax and other deductions, as well as details of employees starting( commencing) and leaving ( suspending) the payroll to Revenue.
It allows for real-time communication between your paymaster and Revenue that relates to employee pay and tax deductions.
By operating in real time, Revenue can ensure the correct tax deduction is being made at the right time for every employee.
Revenues guidance, in relation to those staff who are off pay for the summer months indicates, that in order for the staff members to be able to move credit and cut off to any alternative employment or to flag themselves as potentially eligible for making a claim to DEASP during the lay-off period, the staff member should be flagged as a “leaver” for the period of unpaid leave. Matters related to contractual status during these temporary layoffs are a matter for the staff member to discuss with the ETB.
On return from lay off, ESBS will request from Revenue a new Revenue Payroll notification (RPN) that gives the details of their tax credits and standard rate cut off point for the current year. In the first payroll on return, it may be the case that the staff member is on emergency tax with the normal tax position being reinstated for the next available payroll. If an employee wishes, they can contact Revenue in advance of their return and reinstate the employment records held therein to avoid the emergency basis being notified by Revenue to ESBS. ESBS can only operate the RPN downloaded from Revenue at the time of processing any given payroll – no manual interventions are possible under the PAYE modernisation regulations.