December is the busiest month of the year for payroll professionals. While many workers in other fields enjoy the festive atmosphere, payroll staff remain focused on their responsibilities, preparing and processing payrolls to ensure that individuals receive their payments before Christmas. Having worked in the payroll industry for over a decade—managing payroll teams for various businesses and clients—I understand the importance of being well-prepared to complete the payroll process ahead of the regular monthly payday in December. It’s crucial to close the year-end payroll and ensure everything is ready, including updating the payroll software for the new tax year.
To make this taxing month smoother, I’ve crafted this Year-End PAYE Checklist—a practical guide to help Irish payroll processors complete their responsibilities with confidence and precision. This comprehensive checklist is designed to be suitable for both the public and private sectors, whether for in-house management or external bureaus. It will guide you through the essential steps needed to effectively manage your year-end PAYE responsibilities.
Plan and Communicate Deadlines
“Effective communication is the foundation of smooth payroll processing.”
- Create a December payroll schedule by mid-November, including deadlines for payroll input, bank transfers, and PAYE reporting.
- Inform all stakeholders—HR, line managers, finance teams, and employees—about payment dates and compliance deadlines by December 1.
Request Revenue Payroll Notifications (RPNs) for 2025
In early December-2024, obtain the latest RPNs from Revenue for accurate tax credits and thresholds starting January 2025. Ensure these are integrated into your payroll software for seamless updates. For the latest tax information, check out Budget 2025 updates on tax credits and USC rates.
Conduct a Payroll Audit
Having managed payroll for various sectors, I’ve seen how audits uncover discrepancies and streamline processes. A year-end payroll audit verifies active employees, reconciles payroll data, and ensures accurate tax calculations for payments like bonuses and benefits-in-kind (BIK).
For a comprehensive guide, check out our detailed blog: Payroll Audits: Ensuring Compliance and Accuracy for Your Business.
Process Outstanding Payments
Ensure all bonuses, overtime, or other payments are taxed correctly for 2024 or 2025, depending on when they are paid. For instance, December overtime paid in January must align with 2025 RPNs.
Finalize Payroll Processing
Once all inputs are gathered, begin the payroll processing cycle:
- Verify working hours and tax updates.
- Process pay elements.
- Issue payslips and bank transfer files.
- Collaborate with finance for General Ledger postings.
Conduct a final reconciliation to address discrepancies and confirm that figures align with Revenue submissions.
Update and Health-Check Payroll Software
Get your payroll software ready for 2025 while wrapping up 2024. Most providers offer health-check services to ensure compliance with Revenue, WRC, and pension guidelines. These checks help identify data discrepancies and improve reporting efficiency.
Tips for Effective Health-Checks:
- Validate payroll calculations and reports.
- Optimize data input methods to streamline future processes.
- Align payroll summaries with financial reports.
Stay Updated on Legislative Changes
Tax laws and payroll regulations evolve, and staying informed is crucial. For the latest updates on PAYE tax rates and thresholds for 2025, visit our Budget 2025 section. Regularly consult Revenue resources or trusted advisors for compliance insights.
Final thoughts
Following this checklist ensures your payroll operations are compliant, efficient, and stress-free as the tax year concludes. It also sets a strong foundation for 2025.
For further assistance with year-end payroll, reach out to Dublinledgers for tailored support.
