PAYE Modernisation

What is PAYE Modernisation?

A new system for all employers is being implemented from the 1st January 2019 which is known as “PAYE modernisation”.  This will be the biggest change in how payroll is operated in over 30 years.

This new system changes the way the employers will operate payroll for employees.  Some of the main features of the new system will be:

  • Abolition of all existing payroll returns (P30’s, P45’s, P60’s & P35 returns)
  • Notify Revenue before making payment to employees
  • Upload payroll information to Revenue website each time an employee is paid

The new system is moving to a “real time” system.  This means that the employer will notify Revenue before making a payroll payment to an employee.  Revenue will then notify the employer of what deductions to make from the employee’s salary.

Revenue have confirmed there will be no changes to payment dates which means the employer will still pay the Revenue on the same dates it currently pays them.  However, as Revenue will have up to date information on all payments to employees they will be able to intervene earlier if the employer is underpaying the PAYE/PRSI liabilities.

While this new system will mainly be handled by an employer’s payroll software there are important differences for the employer:

  • Payroll must be prepared before payment is made evening if paying Revenue by monthly direct debit and there are no changes in payment amounts
  • Directors or other family members cannot wait till year end to calculate their wages for the year.

What are the next steps?

Revenue will be advertising this new system over the next few months including letters and emails to employers along with a media campaign.

In order for this new system to work Revenue will need up to date information on all employees employed by a business.  They are planning on sending out letters to employers asking for a full register of the employees in the business.  It is important that all employers have this information ready to send to Revenue when requested.

Payroll software providers have been engaging with Revenue on how the new system will be integrated into their software.  Employers will need to be aware of how the new software will be operated to comply with the requirements of PAYE modernisation.

If you have any queries on the above or would like more details on the new PAYE system please contact us on 01) 2051700 or email

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