The Revenue Commissioners introduced real time PAYE (PAYE modernisation) which went live on the 1st January 2019. This was the biggest change to the PAYE system since the 1960s.
From 1 January 2019 employers are required to report their employees’ pay and statutory deductions to Revenue for each payroll issue.
The salary issue relates to the taxation of the substitute staff who were paid in the first payroll of 2019 and in the case of post primary substitute teachers in the second payroll.
In these payrolls , in which the new system was applied for the first time the payroll files that transferred to Revenue inadvertently included an end date for substitute staff. This informed Revenue that these staff would not be paid under this employer number in the future.
This notification caused Revenue to immediately reduce the tax credits and cut off points to zero for this cohort of staff which meant that when they were next paid, there were no tax credits available to be applied to the salary.
This has meant that some substitute staff paid on the payrolls of the 3rd, 10th and 17th January and who have continued to be employed since have been assigned week 1 / cumulative zero credits or emergency tax.
The payroll software has been amended to prevent an end date transferring to Revenue for future payments which means substitute staff paid on payrolls after the 17th January do not have problems with tax credits.
However this software amendment did not correct the issues that arose for the staff who were paid already.
My Department is working closely with Revenue to implement a solution to this problem. A solution is currently being tested in consultation with Revenue. It is expected that this solution will be successful and all primary substitute teachers and substitute non teaching staff paid on the pay issue of the 21st February will have the correct tax deducted.
Work is ongoing in relation to the post primary payroll and it is anticipated that some adjustments will be processed for the payroll issue of the 14th February and further adjustments will be processed for the next pay issue of the 28th February.
There are staff paid on the payroll who are assigned zero credits apart from those impacted by the end date issue. For example in cases where a substitute staff member is retired and in receipt of pension their credits may be assigned to the pension payment and zero credits assigned to the substitute employment. In addition teachers are placed on emergency basis where their tax position has not been finalised with Revenue. Some substitute staff may have other employments and their credits may be assigned to that employment.
Three dedicated email addresses are being monitored for substitute staff with queries. They are Primtch_payroll@education.gov.ie for primary teacher substitutes, PPPayroll@education.gov.ie for post primary teacher substitute and email@example.com for non-teaching staff substitutes.
We are responding to the taxation queries being received by email. Responses should be fully up to date by Tuesday.
Dedicated phone lines are also available for primary substitutes on 09064 84043; post-primary substitutes on 09064 84161; and non-teaching staff on 09064 84136.
My Department is acutely aware of the inconvenience that is being caused by this problem and is working intensively to resolve it.
Discussions are also ongoing with Revenue to establish the most efficient and effective way to refund deducted tax to employees.