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PAYE Modernisation for Irish Employers

Posted in: All / Posted on November 21, 2017


The Minister for Finance, Mr. Michael Noonan TD, announced the launch of Revenue’s public consultation process regarding the modernisation of the Pay As You Earn (PAYE) system in his budget statement of 11 October 2016.

PAYE modernisation will involve the most significant reform of the PAYE system since its introduction in 1960. Employers will need to calculate and report their employees’ pay and deductions as they are being paid. This will make it easier for Revenue, employers and employees to ensure that the right tax is deducted and paid at the right time.

The new real time reporting regime will be operational for all employee payments being made from 1 January 2019. This will require employers, agents and payroll providers to review their current business processes and practices so that they meet the new requirements.

PAYE modernisation will:

  • improve the streamlining of current business processes
  • reduce the administrative burden currently experienced by employers to meet their PAYE reporting obligations.


The objective of PAYE modernisation is to deliver real time information so that Revenue, employers and employees will have the most accurate, up to date information relating to pay and tax deductions. This will ensure that the right tax deduction is made at the right time from the right employees and, employers pay over the correct tax deduction and contribution for every employee. This will improve the accuracy, ease of understanding and transparency of the Pay As You Earn (PAYE) system for all stakeholders.

SMART PAYE sets out the key design principles of the project.

By working to these principles throughout the design stages, we can ensure that the project meets its objective while also ensuring the benefits for all stakeholders are easily identifiable.

What are the benefits?

For an employer:

  • Seamless integration into payroll.
  • Minimize employer cost to comply.
  • Abolition of P30s, P45s, P60s and end of year returns.
  • Right tax paid on current due dates.
  • Time savings.

For an employee:

  • Simplified online services.
  • Maximise use of entitlements.
  • Automatic end of year review.
  • Real time accurate data.
  • Transparency.

Getting ready for PAYE modernisation

In preparation for PAYE modernisation, employers should ensure that the correct PAYE processes and procedures are being followed. In particular, you should ensure that you have registered all your employees and have received a tax credit certificate (P2C) for each of them. It is also important to check that you have the correct PPS number for each of your employees.

For guidance, these steps should be followed:




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