PAYE Modernisation: Explained for Small Business Owners

PAYE Modernisation: Explained for Small Business Owners

PAYE Mod Image

What is PAYE Modernisation?

PAYE Modernisation will mean that employers are required to calculate and report their employees’ pay and deductions in real time, rather than at the end of the year. This will make it easier for employees to be given the correct amounts of:

  • Income Tax
  • Universal Social Charge (USC)
  • Local Property Tax
  • Pay Related Social Insurance (PRSI)

This comes into effect on 1st January 2019.

What’s Changing?

  • Everything will be completed online
  • P30s, P35s, P45s, P46s, P60s and end of year returns will be redundant
  • Reporting will be in real time and up-to-date
  • More transparency

The acronym SMART is going to become a very familiar sight as it explains what the employer, the employee and Revenue can expect from this new service. However, SMART differs depending on if you’re an employer, employee, or Revenue. See our helpful infographic below:

 Think S.M.A.R.T (1)


As an Employer, What Should I Do?

  • Register your employees with Revenue by the 31st of October
  • Make sure you have your employees’ PPS numbers and current P2Cs for each employee
  • Complete any P45 process for any employees who stopped working for you and submit these to Revenue
  • Have up-to-date tax credit certificates for all of your employees
  • Contact your payroll software supplier for updates on integration


What Support is Available?

In order to prepare small business owners for this change, the SFA have created a quick guide on PAYE Modernisation that you can download here. You could also consider investing in a payroll software that helps you to easily manage all of your sales, purchases, invoices, receipts, cashbooks and bank accounts. Big Red Cloud offer this service which would take the stress off of you and allow you to get on with running your business.


I Don’t Have Payroll Software, What Should I do?

Many small businesses will be affected by this change if they don’t have the resources to submit their figures each pay cycle. If you have the money, consider investing in a payroll service. If not, contact Revenue about your options.  You can apply for exemptions if you are not computer literate, disabled or have insufficient internet access. In cases such as those mentioned, Revenue will make specific arrangements to facilitate simplified manual reporting using customised stationery.

Another option to consider is short-term finance like a cash advance, as repayments are made using a percentage of your daily credit/debit card machine transactions. By reducing the pressure on your cash flow, you’ll be able to do more, such as sign up for a payroll service.

If you have any more questions about PAYE Modernisation, you can contact Revenue by emailing


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