Nov 2014
25
Irish Employer’s Responsibilities - Payment of Wages Act
The Payment of Wages Act 1991 gives all employees the right to a payslip which shows the gross wages and the details of all deductions. A payslip is essentially a statement in writing from the employer to the employee that outlines the total pay before tax and the details of any deductions from pay. Payslips can be provided in electronic/hard copy format.
Deductions from employees’ pay are allowed when:
• It is required by law i.e. Income Tax, Universal Social Charge (USC) & PRSI
• Provided for in the contract of employment e.g. pension contributions
• Employee has given written consent e.g. trade union subscriptions
• They are to recover an overpayment of wages or expenses
• They are required by a court order e.g. attachment of earnings order
• They arise due to employee being on strike
Where a loss is suffered e.g. employee breakages, till shortages deduction is only allowed where:
• It is allowed for in the employee’s contract of employment
• It is fair and reasonable
• Employee has received written notice
• The amount of the deduction does not exceed the loss or the cost of the service
• The deduction takes place within 6 months of the loss/cost occurring
Failure to pay all or part of the wages due to an employee is considered to be an unlawful deduction and a complaint can be made under the Payment of Wages Act 1991.
To keep up with the latest payroll news, check out our new Bright website. There, you'll be able to register for any of our upcoming payroll webinars and download our payroll guides.
Nov 2014
18
Maternity Benefit
Maternity benefit is a non taxable income as it is taxed through your standard rate cut off point (SRCOP) and your tax credits (TC’s). There are a couple scenarios that may arise when you have an employee going out on maternity leave.
• Firstly Revenue should always be informed when an employee is going out on maternity leave as a new P2C Tax Credit Certificate will need to be issued for this employee
• If the employee is receiving the standard €230 a week into their own bank and you don’t top up their wages all you will need to do is zeorise their weekly pay and put them on a Week/Month One Basis.
• If the company receives the benefit but doesn’t top up their pay you will have to zeorise their weekly pay and go in to the additions tab and under non-taxable additions add the description maternity benefit and input the €230 in this section.
• If it is company policy to top up the wages and the company receives the maternity benefit you will need to reduced the weekly pay by the €230 and go in to the additions tab and under non-taxable additions add the description maternity benefit and input the €230 in this section.
• If the company doesn’t receive the maternity benefit and tops up their wage all you will have to do in this case is reduce the weekly pay by the €230.
Maternity Benefit is taxed through the SRCOP and TC’s a new tax credit certificate will be issued for this employee when they go out on maternity leave and it is normally calculated as follows;
€230 X 26weeks = €5,980 the SRCOP is then reduced by this amount i.e. Average annual Cut Off Point; 32,800 – 5,980 = 26,820 this is now the new annual SRCOP
€5,980 X 20% = €1,196 and the Annual TC’s is then reduced by this amount i.e. Average annual tax credit; 3,300 – 1,196 = 2,104 this is now the new annual TC’s
And the new cert is then issued on a Week/Month One basis for the remainder of the year.
Nov 2014
12
Join our Free Employment Law Breakfast Meetings!
Here at Thesaurus Software, we like to look after our customers. That's why we are offering FREE Employment Law Breakfast Meetings to assist our customers with some topical employment law updates. Our employment law experts will also talk attendees through how to best manage these employment law issues in the workplace.
The two hour seminar will cover a range of topics including:
- Managing Sick Leave
- How to handle workplace theft
- Employee dismissal - what you need to know
- Employment Law Update
Following positive feedback from attendees at previous seminars we have decided to run a series of similar events across Ireland. Our next breakfast meetings will be held later this month in Cork and Kilkenny, as follows:
- Thursday 20th November: Rochestown Park Hotel, Cork
- Thursday 27th November: Lyrath Estate Hotel, Kilkenny
At both venues, registration will take place from 8.30am - 9.00am, complimentary tea/coffee and pastries will be provided. The seminars will run from 9.00am until 11.00am.
If you would like to attend one of these events, please email Rachel@thesaurussoftware.com with your name, company name and phone number.
Book early as places are limited and booking out fast!
Nov 2014
9
New strategic state bank to help fund SMEs
The new Strategic Banking Corporation of Ireland (SBCI), a multi-funded strategic bank, was launched by the government on Friday. The aim of the state-backed scheme is to make lending available to small and medium sized businesses.
Minister for Finance Michael Noonan and Minister for Public Expenditure Brendan Howlin launched the scheme in a ceremony in Farmleigh House in Phoenix Park, Dublin. German finance minister and the head of the European Investment Bank (EIB) were also in attendance.
The new SBCI will make an initial €800 million available for SMEs to borrow money at more favourable terms, allow for longer term loans, and to support expansion and job creation. Mr Noonan said “we have big plans for the SBCI and it will be a key source of funding for years to come”.
Initially the SBCI will be jointly funded by €150m from German Bank KFW, €400m from the European Investment Bank (EIB), and €240 from the Ireland Strategic Investment Fund (ISIF).
The scheme is designed to help restart lending to SMEs and could facilitate up to €5 billion in lending to the SME sector over 5 years. Taoiseach Endy Kenny said “it will finance SMEs in first instance but can grow to finance other key sectors of the economy.”
Ireland’s SME sector has suffered a squeeze on credit and investment. SMEs can begin accessing the loan scheme from December this year and it will be administered by AIB and Bank of Ireland.
German finance minister Wolfgang Schäuble said “I am confident the SBCI will help improve the economic situation and labour market in Ireland and contribute to Europe.” EIB president Werner Hoyer said the scheme could be a model for other European countries.
Nov 2014
5
Local Property Tax 2015 - Ireland
The third year of LPT is fast approaching!!! Revenue will be writing to the majority of homeowners shortly, the letters will give homeowners the opportunity to decide how and when they would like to pay their LPT. The letter will include the Property ID and PIN and will also confirm the amount due for 2015. If you wish to avail of a phased payment option such as Direct Debit/Deduction at Source you should confirm your payment method by the 25th November 2014 to allow sufficient time for the payment method to be in place for the beginning of the year.
Revenue will not be writing to homeowners already paying LPT through deduction at source or by direct debit instead their payment method will continue in 2015.
A number of Local Authorities have reduced the rate of LPT for 2015; Revenue will automatically make those deductions. Homeowners can confirm the amount of LPT due for 2015 on their property by accessing their LPT record online using their PPS Number, Property ID and PIN.
Key Dates for 2015:
• 7th January 2015 – Deadline for paying in full by cash, cheque, postal order, credit card or debit card
• January 2015 – Phased payments by Deduction at Source and regular cash payments through a Payment Service Provider to commence in January
• 15th January 2015 – Monthly Direct Debit payments commence and will continue on the 15th of each month thereafter
• 21st March 2015 – Single Debit Authority payment deducted
If you are the liable person for the residential property on 1st November 2014 you have to pay LPT for 2015 even if it is sold before the end of 2014.
Full details can be found on Revenue’s website www.revenue.ie
Oct 2014
23
Breakfast with Bright Contracts
Thesaurus Software had an interesting morning yesterday as we had our first Employment Law breakfast meeting. We met with a number of our customers at the Pillo Hotel in Ashbourne for a two hour employment law seminar.
The morning had a particular emphasis on our HR software Bright Contracts and the importance of having employment contracts and employee handbooks in the workplace. The topics under discussion throughout the morning included:
• Managing sick leave
• How to handle workplace theft
• Employee dismissal - what you need to know
• Employment law update: The Whistleblowing Bill and The Workplace Relations Bill
We were delighted with the turnout for the event and really enjoyed meeting our customers and answering their queries. With the morning being a great success, we are starting to plan more breakfast meetings in various locations across Ireland.
Oct 2014
18
Illness Benefit
Illness benefit is liable to PAYE but not USC and PRSI. A lot of confusion arises on the employers’ role of the taxation of the benefit. If an employee is out sick for more than 6 days they can claim illness benefit from the Department of Social Protection (DSP). There are a couple of scenarios that will arise when this happens:
• You will receive a letter from the DSP stating that they are receiving a cheque for Illness Benefit and advising you on the amount liable to PAYE
• You must reduce the pay by the amount stated by the DSP in the weekly/monthly basic and input the Illness Benefit in the correct section on the payroll
• You haven’t had any correspondence with the employee, in this case you must assume they are in receipt of the benefit and tax them. The daily rate is €31.33 and the weekly 6 day benefit is €188.
• If the employee has opted for the employer to receive the cheque it still needs to be taxed in the Illness Benefit section on the payroll.
• If it is your company's policy to pay an employee while out sick you must reduce the weekly/monthly pay by the amount of Illness Benefit they are receiving.
• If is not your companies policy to pay an employee while out sick their pay must then be zeroised.
• If the employee returns and you’ve inputted the benefit into the system and they weren’t receiving the benefit , simply go to the illness benefit section and put a “–“ figure of the amount you deducted. This will refund any tax deducted, i.e. -€188
Oct 2014
15
Sep 2014
22
Irish Employers - show your staff your appreciation!
Have you employees with 20 plus years of service? If so why not say thank you with a gift.
Revenue Commissioners offer tax relief on long service awards, which is considered to be at least 20 years of service. Tax relief on long service awards can be in addition to the small benefit exemption.
Employers can reward employees for long service with tangible articles with a value up to a maximum of €50 per year of service, starting at 20 years of service and every 5 years thereafter.
20 years of service – value up to €1,000
25 years of service – value up to €1,250
30 years of service – value up to €1,500
35 years of service – value up to €1,750
The award must be a tangible article e.g. a gold watch, it does not apply to awards made in cash.
Tax will not be charged provided:
• The cost to the employer does not exceed €50 per year of service
• The award is made in respect of service not less than 20 years
• No similar award has been made to the recipient within the previous 5 years
Where any of the conditions are not met PAYE, PRSI & USC must be applied on the full amount.
This concession applies to directors as well as employees.
Full details can be found on Revenue’s website www.revenue.ie
Sep 2014
12
Irish Employers - Lump Sum Payments that qualify for tax relief
The following redundancy and retirement payments, although not completely tax exempt; do qualify for some relief.
• Wages / Salary in lieu of notice on retirement or redundancy.
• Payment paid by your employer which is additional to the statutory redundancy payment. This additional payment is known as an ex-gratia payment or golden handshake and is up to certain statutory limits.
If your employer provides all or part of the lump sum in another form e.g. car, holiday, etc. the cash value of this item is taxable.
If this lump sum is on the termination of a contract this payment is chargeable to tax in the normal way.
If an employer pays for the cost of retraining an employee as part of a redundancy package, up to €5000 of the retraining cost is exempt from tax. The following conditions apply:
• The employee has more than 2 years continuous full time service
• The retraining is completed within 6 months of the redundancy
• The retraining is designed to improve skills/knowledge to assist in obtaining employment or setting up a business
• The employee cannot take cash instead and must avail of the retraining.
The tax exemption will not apply to dependents, spouse or civil partner of the employer.
To keep up with the latest payroll news, check out our new Bright website. There, you'll be able to register for any of our upcoming payroll webinars and download our payroll guides.
