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 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 has been working closely with Revenue to implement a solution to this problem.
I am pleased to advise the Deputy that a solution was applied for some staff in the post primary teacher payroll that issued 14th February. In that regard, a total of 2,450 new Revenue Payroll Notifications were loaded to the post primary teachers’ payroll of 14th February. The payroll generated refunds for 69 substitute teachers. Further RPNs for post primary teachers will be processed in the payroll of 28th February and refunds of tax will issue where due. The exact number will not be known until the payroll is fully processed.
Revenue has forwarded 4,728 RPNs to be applied to the primary teacher and non-teaching staff payrolls for payment on the 21st February. It is expected that 533 refunds will be issued to primary substitute staff and 177 refunds to substitute non teaching staff on the 21st February.
My Department will continue to assign RPNs notified by Revenue to teaching and non-teaching staff on an ongoing basis and is endeavouring to ensure that every payee has the correct RPNs) applied to them.