Since 1 January 2024, employers in Ireland have been obligated to report specific tax-free payments and benefits provided to employees and directors. These reports must be submitted to Revenue on or before the date the payment or benefit is provided. This requirement, known as the Enhanced Reporting Requirements (ERR), is part of Revenue’s efforts to increase real-time compliance.
Here’s a breakdown of the tax-free items currently included under Phase 1 of ERR:
- Small Benefit Exemption: Benefits deemed non-taxable by utilizing the small benefit exemption.
- Remote Working Daily Allowance: The €3.20 daily allowance for remote work.
- Travel and Subsistence Payments: Direct reimbursements to employees for travel and subsistence costs.
(Note: Expenses paid via corporate credit cards or central booking systems where the employer settles costs directly are not within the scope of ERR.)
Transitional Period Ending Soon
To help employers adapt to these new requirements, Revenue has adopted a flexible approach throughout 2024. During this time, no audits or penalties for non-compliance have been enforced. However, this transitional period will end on 31 December 2024.
Despite employer concerns about the “on or before” reporting deadlines, there has been no relaxation of this requirement. Employers must ensure that their systems and processes are capable of meeting these real-time reporting obligations moving forward.
Preparing for 2025
Revenue has indicated that ERR compliance in 2024 will significantly influence risk assessments and potential interventions in 2025. To avoid issues, employers should take the following steps:
- Review current reporting processes for accuracy and efficiency.
- Ensure all tax-free payments and benefits are captured and reported correctly.
- Build or upgrade systems to manage ERR in real time.
By addressing these requirements before the end of the year, employers can avoid potential penalties and ensure a smooth transition into 2025. Enhanced Reporting Requirements are expected to remain a key focus for Revenue moving forward. We have also compiled the full Irish payroll proess checklist for year end 2024 in our article ” Year-End PAYE Checklist Ireland 2024: A Guide for Payroll Processors”.
