Getting started with payroll in Ireland: What you need to know

From #payroll obligations to choosing the right payroll system, it can feel intimidating to get started with the payroll system. But there are several key steps to ensuring compliance with regulations and to effectively manage employee compensation without tearing your hair out. It can feel like a long to-do list but with our quick step-by-step guide below, you’ll realise the key is keeping things organised and staying on top of any possible changes to legislation.?

???? First things first

Before anything, the most important step is to register your company with the #RevenueCommissioners as an employer. To do this, you will need to obtain an Employer Registration Number (#ERN) and ensure you're set up for #PAYE (Pay As You Earn) to deduct income tax and Universal Social Charge (USC) from employees' wages.

???? What does it all mean?

Understanding payroll obligations in itself can be a myriad of confusion so familiarise yourself with Irish employment laws, including the Payment of Wages Act and the Organisation of Working Time Act. It’s crucial to understand these requirements for tax deductions, social insurance, and other statutory payments.

???? Who’s who??

Having your ducks in a row will make things much more smooth, so while setting up the system, collect all the necessary information from each employee, including their PPS number, tax credits, and any other relevant details. You will need to collate all employees’ contracts, including pay rates and hours of work.

???? Which payroll system?

Decide whether you would prefer to manage payroll in-house using software, or outsource it to a payroll service provider. Popular payroll software options in Ireland include #Sage, #BrightPay, and #QuickBooks and can make the process more streamlined and accurate. However, make sure that whichever system you choose is compliant with local tax laws and can handle reports and submissions to Revenue.

???? Scheduling

Determine how often you will pay employees, weekly, bi-weekly, or monthly, making sure to communicate the payroll schedule to employees and ensure consistency.

???? Calculations?

Use your payroll system to calculate gross pay, tax deductions, #PRSI (Pay Related Social Insurance), and any other deductions (e.g., pension contributions) and make sure to keep accurate records of hours worked, overtime, bonuses, and any leave taken.

???? Making payments

Finalise how you will pay your employees, either through bank transfers or another agreed method, along with providing payslips that detail earnings, deductions, and net pay.

???? Submitting reports

You will need to submit regular payroll reports to the Revenue Commissioners, including monthly/annual returns and any necessary adjustments. Records of all payroll transactions should be kept for at least six years for legal compliance.

???? Stay informed

It’s vital to stay up-to-date with tax rates and employment laws to ensure ongoing compliance. It can be very helpful to join relevant associations or forums to stay connected with other employers and payroll professionals.

???? Consider professional advice

If you are unsure about any aspects of payroll management, consider consulting with a payroll specialist or accountant familiar with Irish laws, such as Azure Global.?