Payroll Compliance Obligations

Keeping up with Payroll Compliance obligations is as important or perhaps even more important than ever. To help you meet these obligations we have set out here some recent developments and reminders.

Civil Service Rates

Subsistence

The domestic Civil Service subsistence rates have increased with effect from 29 January 2025. The new rates replace the old rates in force since December 2023.

The relevant domestic subsistence rates are now as follows:

1. Overnight Rate (Excluding Dublin)

 

2. Day Rates

 

3. Dublin Only

 

Mileage
The Civil Service mileage rates for cars remain unchanged and are as follows:

Mileage claims made in respect of business journeys carried out in fully electric vehicles should use the rates applicable to engine capacity 1201cc-1500cc below.

 

Enhanced Reporting Requirements

As you are aware, mandatory Enhanced Reporting Requirements (ERR) in relation to certain tax-free payments of expenses and benefits made by Employers to their employees (including Directors) have been in place since 1 January 2024. These payments are known as “Reportable Benefits”.

We would like to remind you that while Revenue did not penalise Employers for non-compliance with the ERR in 2024, this grace period ended on 31 December 2024. As ERR is now expected to feature prominently in Revenue compliance interventions from 2025 onwards, it is important that all Employers are aware of and are complying in full with their ERR obligations. With this in mind, we have outlined below the main features of the ERR regime for your information.

Real Time Reporting

Employers must report all relevant payments/benefits on or before the payment/benefit is made to an employee. For example, if Reportable Benefits are paid to employees outside of normal payroll runs, these payments need to be included in separate ERR submissions to Revenue.

Where HDS acts as your payroll agent you will need to provide us with details of each and every payment/benefit on a timely basis so that we can make the necessary ERR filing on your behalf.

Reportable Benefits

There are currently three types of Reportable Benefits under the ERR, as follows;

1. The remote working daily allowance of €3.20.
2. The payment of travel and subsistence expenses, whether vouched (receipts-based) or unvouched (based on Civil Service rates).
3. Items qualifying for the small benefit exemption (i.e. up to five benefits per employee per year in 2025 subject to an overall upper limit of €1,500 including vouchers, hampers, other small non-cash gifts).

It is important to understand that the ERR applies to tax-free payments only. It has always been and remains the case that Employers have an obligation to ensure that the conditions for making tax-free payments are met and that they maintain comprehensive records and documentation to support the tax-free treatment of any such payments (e.g. employee mileage/subsistence claim forms or receipts). Any payments where a tax-free treatment cannot be supported should be taxed and details returned through payroll in the usual way.

Reporting Methods

There are three reporting methods available to Employers as follows;

1. Payroll software packages. This should be the simplest method for reporting ERR benefits, especially where the benefits are paid as part of the normal weekly or monthly payroll run.
2. ROS File Upload.
3. ROS Online Form.

Further information in relation to the ERR can be found on Revenue’s website –https://www.revenue.ie/en/employing-people/becoming-an-employer-and-ongoing-obligations/err-jan-2024/index.aspx

If you have any queries in relation to the above, please do not hesitate to contact us.