The Pay As You Earn (PAYE) system underwent significant modernisation in Ireland with the introduction of real-time reporting for employers (PMOD) on 1 January 2019. This represented the most significant reform of the administration of the PAYE system since its introduction in 1960.
The changes meant that every time employers pay their employees, they now report the pay and statutory deduction details to Revenue, the Irish Tax and Customs administration, as part of the payroll process. The reform of the PAYE system to real-time reporting brought significant efficiencies and improvements in accuracy and transparency to some 200,000 employers and pension providers, and 2.6 million employees and pension recipients.
Revenue engaged extensively with key external stakeholders as part of a co-design approach. This involved intensive coordination, cooperation, consultation with payroll professionals, tax practitioners, accountancy bodies, business representative organisations and payroll software developers. These groups operated in parallel with Revenue to ensure their payroll software, employer and agent systems and employer/operator readiness were prepared, tested and in place in a timely fashion.
The governance structure supporting this project was a cross Departmental project board where multiple Revenue areas worked in conjunction with the Department of Social Protection (the government agency with responsibility for the provision of income supports, employment services and other services) to ensure the projects’ success. This approach continues and ensures transparency of actions, leverages experiences and provides a platform for improved and more timely data sharing.
The co-operation and collaboration within Revenue and with a range of external stakeholders was essential to the successful introduction of real-time reporting for payroll. Together the various stakeholders worked with Revenue to implement PMOD to the highest standards with a high level of data and reporting compliance and reduced levels of administrative burden on businesses.
The key driver in building these relationships and gaining the confidence of the private sector and public included:
- inclusion of partners in in design and collaborative workshops
- early and full communications in clear and unambiguous language
- rapid responses to questions and issues
- transparency and integrity in plans and deeds.
These well-developed relationships were critical in the successful implementation of a range of government supports to employers during the COVID-19 pandemic in 2020. This high level of engagement with employers allowed open and candid feedback in near real-time to systems developments and identified issues. This feedback allowed policy makers and Revenue to adjust the schemes to increase their societal and economic impact.
In 2019, Revenue’s annual customer survey focused on employers. The results of this survey indicated that:
- 89% of employers agreed that PMOD makes it easier to submit tax returns and payments for their employees;
- 78% of employers agreed that PMOD means payroll takes less time;
- 70% of employers agreed that Revenue’s 2018 outreach programme assisted preparations for the new regime.
Trust & Compliance
