Budget 2011 - Share Schemes

Budget 2011 made a number of changes to the tax treatment of gains arising from various types of share schemes, including making such gains chargeable to the new Universal Social Charge (USC). This note from Revenue outlines these changes and provides some general guidance on their likely impact.

Christmas Break

I would like to thank all the readers of my Blog and all Ardbrook's customers for a successful 2010 and wish you all a happy and prosperous 2011.

Ardbrook's offices will be closed from 1pm on Friday 24th of December until 10am on Wednesday December 29th

Budget 2011 - Year-End 2010 Check List

This is check list of reports and functions to be performed in your EuroPayX or PayDay payroll when closing off 2010 Tax Year and entering 2011 Tax Year. For more information see the documentation provided and/or manual. Once again if you have a week 53 ( In 2010 a payroll run date of 31st December) it must be done as a separate payroll  run and not be included in holiday weeks.

EuroPayX and PayDay Budget Update CD's

Ardbrook will post out the Budget update CD's for 2011 Today. If you require the update sooner please contact us, you can collect your CD by courier or receive your update via email or by download.

Budget 2011 - PRSI Class K

As part of Budget 2011 Office Holders for the purposes of PRSI are to be assigned to class K. Emoluments paid by public bodies to public office holders.

Budget 2011 - Revised Operation of Universal Social Charge

Previously we had been told that for all practical purposes we could ignore the lower €4004 threshold, however today Revenue stated that the arrangements for the treatment of the lower threshold of Univeral Social Charge (€4004) has been changed so that those earning €4004 are not to be subjected to charge.

Revenue - Employer Copy of Tax Credit Certificate

Employer’s copy of  employees Tax Credit Certificates (P2Cs) will issue through the Revenue On-Line Service by the 15, December 2010. For Employers/Agents not registered for ROS, these certificates will be sent by post during the week commencing 13 December 2010.

Budget 2011 - The Parking Levy

The Ministerial Order to introduce the Parking Levy was signed in July 2010, and can be introduced at any time, subject to 3 months notice. It is unlikely the Parking Levy will go live prior to 1 April 2011, and will only if the designated areas in which the levy will apply are published and the 3 months notice of implementation given.

Budget 2011 - Irish Payroll PRSI Clarifications

Confirmation from Welfare for Class K - if earnings less than or equal to €100 in a week record as M.

Employee and Employer reckonable earnings for PRSI purposes are to be calculated independently, and at the relevant rate in respect of each seperate amount. This leads to the potential problem where employee and employer PRSI are returned at two different PRSI classes. To avoid this the return (contribution) will always be at the subclass designated by the employee reckonable earnings.

Advance Notice to computer users for PRSI changes now available on welfare.ie click here

Budget 2011 - Irish Payroll USC Clarification

The €4,004 yearly exemption is to be applied for to the Revenue only at the end of the year.  It is not to be broken down into weekly/monthly/etc equivalents to be applied in weekly/monthly/etc payroll.  This is different to the Income Levy where the €15,028 was broken down and applied weekly/monthly/etc.   Throughout the year the only thresholds/rates to be applied in payroll are €10,036 @ 2%, the next €5,980 @ 4% and the balance at 7%.  Folks aged 70 or over pay a max of 4%, starting above €10,036. This exemption it has to be applied for at year end to the revenue commissioners by the individual employee.


DISREGARD!

THIS HAS NOW BEEN CHANGED BY DEPARTMENT OF FINANCE TODAY 15 December 2010

Budget 2011 - Emergency Tax Credits and Bands

With the revised tax credits and Cut Offs for Irish payroll for 2011, when calculating tax on an emergency basis the credits and cut offs are as follows

Budget 2011 - Pension changes

Pension changes for Irish payroll introduced in Budget 2011

Employee PRSI on pension contributions

From 1 January 2011, employee contributions to occupational pension schemes and other pension arrangements will be subject to employee PRSI and the Universal Social Charge. The PRSI change will be legislated for in the Social Welfare Bill.

Employer PRSI on pension contributions

The current employer PRSI exemption for employee contributions to occupational pension schemes and other pension arrangements will be reduced by 50% from 1 January 2011. The change will be legislated for in the Social Welfare Bill.

Budget 2011 - PRSI Changes

The several changes to the calculation of PRSI in Irish payroll for 2011 as follows:

Employers

There are some changes to rates for 2011.

The Minister announced an Employer Jobs Incentive Scheme for 2010, this scheme has been extended for 2011. Where an employer creates a new job and takes on a person who has been unemployed for at least six (6) months, the employer will be exempt from paying Employers PRSI in the respect of that person’s employment for a period of one (1) year from the date of commencement.

Budget 2011 - New Universal Social Charge

For Irish payroll the new Universal Social Charge is a combination of the old Income Levy and the Health Levy.  The Universal Social Charge effective 1 January 2011, is payable on Gross Income before any
relief for Pension Contributions, Capital Allowances or Losses. All individuals are liable to pay the Universal Social Charge, if their gross income exceeds the threshold of €4,004 per annum. Medical card holders are not exempt from the Universal Social Charge.

Budget 2011 - Other changes

Other changes that may have an impact on the running of Irish payroll in tax year 2011 are as follows:

• Abolition of Tax relief on Trade Union subscriptions
• Abolition of Tax relief on subscriptions to professional bodies
• Abolition of Tax relief on approved share option schemes
• Abolition of relief on BIK for employer provided childcare

Budget 2011 - Public Service Pension-related Deduction Changes

From 1 January 2011, the pension-related deduction which is charged to earnings in the public service will be subject to employee PRSI and the Universal Social Charge to be introduced on 1 January 2011. The PRSI change will be legislated for in the Social Welfare Bill.

Budget 2011 - PAYE Tax Credits and Bands

Tax Rates

• The Standard Rate remains at 20% and the Higher Rate is unchanged at 41% or 40% if Marginal Rate applies (the marginal rate is unchanged).
• The Sub-Contractor rate has changed it is now for sub contractors registered for tax with an established compliance record at 20%  and 35% for sub contractors not registered for tax.

Budget 2011 - Main Points

The main points of budget 2011, in particular those relating to the calculation of irish payroll are:

• No reduction in state pension
• €10 reduction in Child Benefit in both lower and higher rates, additional reduction of €10 for third child
• Extension of Employer's PRSI incentive scheme to 2011

Revenue - eRegistration

Monday 29th November 2010 saw the introduction of an increased range of eRegistration services through Revenue’s Online Service (ROS) These services include:-

Lastest Budget 2011 Predictions

With Budget 2011 only a day away here are some of the latest predictions for what that budget might contain

• Employee PRSI ceiling to be abolished, currently at €75,036
• A lowering of personal income tax bands and credits or equivalent measures
• A reduction in pension tax relief and pension related deductions

PayDay - Printing Screens

Within the PayDay irish payroll software package, both the Employee Details and Adjust and Calculate/Payslip screens can be printed by pressing the F12 Key.

Budget 2011 details revealed in Recovery Package MOU

The Memorandum Of Understanding about the Recovery Package published yesterday seems to imply that there will be changes made to the revenue systems during 2011 (as opposed to at the start of the year). The document refers to a "yield €945m in 2011 and an extra €300m in a full year" when it discusses changes to personal tax bands and credits.

This would seem to indicate that the values will change after the first quarter of 2011 and that these changes will not be retrospective. In other words, we could have two (or more?) separate cumulative systems running during 2011, or that the existing bands and limts will run into the new tax year and the revised tax credits and bands only come into effect after Q1?

EuroPayX - Now you can email P60's and Levy Certs

For this tax year end Ardbrook have added the option to our EuroPayX irish payroll software to enable you to email P60's and Year End Income Levy Certs to your employees. If you already use the email payslip facility then this option is for you.

EuroPayX - Make use of Word Links

The EuroPayX irish payroll software has a facility called Word Links which allows you to "MailMerge" with Microsoft Word. This is done by creating a Word document with bookmarks inserted into positions at which data from the payroll will be placed, for example employee name,address,salary etc, then within EuroPayX you create a link which defines what data is to be sent and the name of the Word document. Word links can be used for sending standard letters to employees on a variety of topics such as pension, salary changes etc.

EU agree €85 billion rescue package for Ireland

The EU has tonight agreed a €85 billion rescue package for Ireland, €10 billion of which will immediately be used to secure the banks. €17.5 billion of these funds are to come from the Irish pension reserve fund.the remainder being supplied by the EU and IMF at an average interest rate of 5.83%. 

EuroPayX - Setting up a Gross To Net Excel Link

It can be useful to setup an Excel link in EuroPayX specifically to replicate the Gross to Net report but with additional fields (usually each Addition and Deduction in the payroll). This overcomes the limitations on the standard gross to net report whose content is limited by the size of an A4 page and allows for a greater level of detail in reporting.

€15bn Cuts and Taxes announced

Some of the taxation measures introduced in the four-year plan are as follows

• Maintain the 12.5% corporation tax rate
• PAYE threshold reduced by €3,000 to €15,300 by 2014
• Net Pay by 2014 for a single person on €55,000 will be reduced by €1,860 per annum (€36 per week) or 4.8%. The net pay for a married on-income family on €55,000 will be reduced by €2,310 per annum (€44 per week) or 5.4%.
• pension relief changes in the plan provides for the elimination of employee PRSI and Health Levy relief on pension contributions in 2011. It also commits, among other changes in 2011, to reducing the annual earnings cap for employee/personal pension contributions by almost 25% from €150,000 to €115,000

Budget 2011 will not be brought forward

Taoiseach Brian Cowen stated last night that the budget will not be held earlier than planned. The €15bn euro deficit reduction plan will be unveiled this afternoon. It has been reported in the irish press that included in the four-year plan will be

• an increase in  the marginal rate of tax to 42 per cent or higher
• tax credits being reduced and tax bands being widened
• a cut to the minimum wage from €8.65 an hour to €7.65
• introduction of a "local services" charge
• cuts to the social welfare budget of €2.5bn over the four years

Will you have a Week 53 this year?

Simply put if your payroll date falls on Friday the 31st December 2010 then you will have a week 53 payroll period, otherwise no. In a week 53 situation the payroll period must be run individually and cannot be part of a two week calculation for holiday shutdown as week 53 is run on week one calculation basis and not a cumulative basis. As a result, the employee will get the benefit of more than the year's total tax credits and standard rate cut-off point

Reduced frequency of tax returns and payments

Reductions in the frequency of PAYE/PRSI and VAT tax returns and payments for smaller businesses will again be extended to eligible businesses from 1 January 2011. Similar arrangements in respect of RCT will also become available from that date.

PayDay - Did you know about pop-up calculator

In PayDay if you right mouse click in a numeric field in any window then a calculator will pop-up, you can then use it and return the result into the numeric field on screen.

Irish bank modulus checker available for software developers

Modulus Checker is software developed by Ardbrook Limited, that enables the user to validate the accuracy of any sort code / bank account number combination, for the clearing banks within the Republic of Ireland and Northern Ireland; and sort code only for the non-clearing banks.

Ireland asks for EU/IMF bailout

Taoiseach Brian Cowen has announced that the EU has agreed to a joint EU/IMF bailout details of which will be negotiated in the coming weeks. The package will be over three years and is linked to restructuring of the Irish banking sector and a deficit reduction plan. Brian Cowen also stated that income tax levels will be returned to 2006 levels.

EuroPayX - Did you know that photos can be linked to an employee

In EuroPayX a photograph can be linked to an employee's master file record. To do this simply click on the HR tab and then using the browse button against the image file entry, locate and select the required image. The image selected will appear when viewing the employee master record.

Government may accept EU funding

Today Minister for Finance Brian Lenihan said the Government may accept EU funding for the banks after talks in Dublin with the European Union and International Monetary Fund.

The Government however is also expected to battle to prevent any increase in the €6 billion adjustment proposed for the 2011 budget and the €15 billion target in the four-year plan.

What Everybody Ought to Know about P30/P35 Differences

As we approach the end of the tax year our minds turn to P30/P35 differences, or maybe not! If, on period update (or manually selecting the P30/P35 comparison option) you find that you have a difference between your P30 (Company) and P35 (Employee) totals either in the tax, PRSI or both then it may be due to one of the following reasons

Dataset Archiving in PayDay

DataSet Archiving in PayDay is the automatic storing of Datasets during each period update, but before clearing down all this period values. Archived Datasets can then be accessed at any stage, allowing reports to be run, etc. To access Archived Datasets (ensure there is no currently open Dataset) select ‘File’, and then ‘Archived Datasets’ from the main menu.

Parking Levy Awaiting Implementation

Recently I have been queried a number of times regarding when the parking levy will start. The current situation is that the minister has signed the parking levy into force so it can go live at any time, but it is still awaiting implementation because there are issues in defining the designated areas. Watch this space ....

Four-year budget plan to be announced next week

Minister for Justice Dermot Ahern said yesterday that the government would publish it's four-year budget plan early next week. This plan will contain the outline of the proposed budget cuts totalling €15bn over the next four years, budget 2011 will contain the largest single adjustment of €6bn.

Universal Social Charge

As we await Budget 2011 on December 7, I want to take a look at one of the changes announced by Brian Lenihan in his budget speech for Budget 2010, the creation of the Universal Social Charge. Originally this was to "replace employee PRSI, the Health Levy and the Income Levy", however this is now unlikely given the time constraints and it will simply combine the Health and Income Levies. I think it is fairly safe to assume that the Universal Social Charge will operate as a "super" Income Levy, that is with new increased rates and adjusted bands. PRSI will be as before but less the Health Levy.

How to Process Disabilty Benefit

To handle Disability Benefit for Irish payroll when the employer pays the employee and the employee gives the cheque(s)  to the employer.

N.B. Social Welfare payments are not subject to Income Levy

The Payroll Administrator need to set up three new pay elements:

1. Disability Addition Taxable            - Gross Addition, subject to Tax but not PRSI
2. Disability Deduction Taxable         - Gross Deduction , subject to Tax and PRSI
3. Disability Addition Net                  - Net Addition, subject to neither Tax nor PRSI

EuroPayX - View Past Employee Payroll Record

You can display an employee's record for any past period by clicking on the calendar tab on the employee window and then double-click on the date required, EuroPayX will then work out the payroll period for that date and then display a copy of the employee record for that period.

EuroPayX - Did you know about Diary Events

You can create a diary event in EuroPayX to remind you when to perform a desired action, so that for example you can enter the date on which an employee is due to return from maternity or paternal leave and the event will appear on the system when processing the payroll for that period. To create a diary event use the employee screen, call up the record for the employee to which the event applies and then click on the diary tab. Enter the date on which the reminder is required, EuroPayX will work out the payroll period and you simply enter the text that you wish to appear in that period.

You can NEVER have too many Back-ups

Remember to back-up” is the sort of advice that’s taken for granted like “remember to wash behind your ears” and “don’t feed the monkeys”. It’s easily given and just as easily shrugged off. “Whatthehell, it won’t happen to me”. Really? You’ve never had to search for a phone number or address, or re-construct a document that should have been there? At a low level, it’s annoying and wastes time. A worst case scenario may lose you a job or a business. Let me give a few facts and figures.

ATTENTION, PayCE users!

Do you know that Ardbrook provide Irish payroll systems suitable for any size of enterprise? If you are comfortable and happy with PayCE, why not use one of our payrolls?

PayDay and EuroPay Xtra incorporate full compliance with all aspects of PAYE and PRSI and they are rapidly updated to take into account budgetary and legislative changes. You can have an unlimited number of employees, departments, cost centres etc. In the multi-company versions you can have an unlimited number of companies. Fixed, variable and memo pay elements are catered for and the payroll for any period can be calculated, checked and adjusted, if necessary, prior to the update.

Reports can be outputted to Excel, Word, and in HTML and Acrobat (PDF) formats. If you have access to the internet then payslips can be compressed, and password protected if required, and delivered using your own email service.

Why not file your P35, P45s and receive Tax Credit files from the Revenue Online Services (ROS)? Take the hassle out of Central Statistics Office (CSO) returns with our XML link to the CSO website. Links to time and attendance, personnel and general ledger systems are just some of the other features available.

Worth checking out!

It's official Budget adjustments of €6bn

The Government announced today it plans to take measures totalling €6bn in December's Budget. Finance Minister Brian Lenihan has stated that €4.5bn of the €6bn will be in the form of expenditure cuts, the remaining €1.5bn will be in the form of increased taxes. However the details of these measures, of most interest from a payroll point of view will have to wait until budget day, so watch this space!

EuroPayX Employee Self Service Demo now online

EuroPayX Employee Self Service (ESS) is a convenient, secure and user-friendly web based application that provides employees with access to their personal and payroll details. ESS allows employees to change their own address, contact details and bank account details. ESS provides details of payslips, both current and historical. ESS can operate using an employers’ intranet or via a web ASP service.

The principal advantage for employers providing ESS is that it is a more efficient means of collecting changes to employees’ details and distributing payroll related details to employees. This is particularly true for organizations dispersed over a number of physical locations. It also helps reduce the number of routine information requests and transactions made directly to payroll personnel.

To access the demo site click on the following Link http://www.ardbrook-ess.ie/

Attention Payroll Users!

Do you use Ardbrook’s PayCE software for your direct debits and credits? If not, why not? PayCE, which allows you to credit/debit electronically, works very comfortably in tandem with other software systems. PayCE is compatible with all the banks – most of whom use it themselves.

This totally automated payment process virtually eliminates administration,postage, stationery and printing costs. The system painlessly takes care of fees, memberships, leases, loans, rentals, insurance payments etc. etc.

PayCE includes a database holding all sort codes for all banks in the Republic of Ireland (ROI) plus a database holding all sort codes for all banks in Northern Ireland (NI). Full validation of all ROI and NI bank accounts (modulus checking) is also carried out by PayCE. This means that you can ascertain whether the bank details for a customer / supplier are valid before payment thus eliminating the cost and hassle incurred by a payment being returned by the bank.

Biggest Budget Correction in History of State

It has been reported that Minister Brian Lenihan will be announcing later today that the total correction required for Budget 2011 will be nearly doubled to between  €5.5bn and €6bn, when only a few months ago the goverment was projecting a figure of €3bn, this is the largest budget correction in the history of the State. Full details will be announced in two weeks in the four year budgetary plan, followed by the budget on December 7.

P60 Stationery

Revenue is no longer making P60 stationery available for employers to print P60s for their employees. For the year 2010 onwards, employers must print the P60 form on their own blank stationery. A Revenue approved template of the P60 is used in both our payroll products EuroPayX and PayDay.

EuroPayX - Did you know about Email payslips logos

If you use the email payslips option within EuroPayX that you can put your own company logo on the top of the email payslip document. To set the logo file choose Options, Pay Controls and click on the Email tab. Then set the Email Payslip logo path and filename, the logo file can be in bitmap or jpeg format.

Welcome to Bill's Ardbrook Irish Payroll Blog

Welcome to my new Ardbrook Irish Payroll blog. The aim of this blog is to enable me to provide you with news, tips and information regarding payroll trends in Ireland and updates on Ardbrook's various software products including EuroPayX and PayDay.

I will post as and when there is something to say, though as we approach budget time postings will become more frequent. To keep updated on postings you can subscribe to the news feed that has been made available. I hope that you will find this blog useful, with the ability to provide an effective means to share information.

Bill.