Registering employees for PAYE & PRSI

Red_Marauder

How long does a company have before it must register its new employees for PAYE/ PRSI with the revenue after the employees begin working?

How serious would it be treated if a company failed to register such employees' employment within, say, 3 months?

J.Ryan

They could just decide to gross up any payments you've made to them since they started, then apply interest and penalties.

It will depend on your compliance history, but I'd be worried.

Red_Marauder

Worried in what way? I mean is there a specific law broken in not registering employees' details with revenue asap, or would a 3 month window be seen as acceptable?

J.Ryan

They have proceedures if you have the PPS and proceedures if you don't, you are meant to make the deductions when you pay them, how can you justify a 3 month window?

katie_elder

I would think three months is a long time not to have registered employees. There are no direct penalties for not registering them as far as I am aware. However if you have been operating the emergency tax rules in respect of the employees salaries it shouldn't be a major problem but you should have paid over this tax to Revenue monthly and they could potentially charge interest. If you haven't been operating emergency tax you may have already created significant tax liabilities for yourself. I would register the employees as soon as possible. If you need more assistance here feel free to contact me.

dbran

Hi Red_Marauder

Notification should be sent to the local Revenue office responsible for the geographic location where the business is managed and controlled within 9 days from the date the employer takes on the employee and is liable to PAYE.

An employer is liable to deduct paye if they pay

€8 per week (or €36 per month) in the case of an employee engaged full-time or
€2 per week (or €9 per month) where the employee has other employment

If this was going on for three months they would almost certainly insist on applying emergency tax to the net figure that was paid from day one. The rate of emergency tax together with PRSI and UHC would be almost 50%. The net amount that you paid would be grossed up at this rate and you would be made to pay the difference. There would also be interest charged. Penalties can range from 10% to 100% of the tax depending on whether the revenue deemed it to be a deliberate default or just a careless mistake and whether a qualifying disclosure is made. As it is three month I would think it would be argued as a deliberate action by you to not pay the tax and the maximum penalty could arise.

In short, you need to register the employee immediately and pay over all the tax due before it gets any more serious. Chances are if you pay it now you could argue you are self correcting and then only interest woud apply.

Remember all it takes is a disgruntled employee who discovers that their stamps have not been paid over to the social welfare (thus meaning they are not entitled to the dole) after you have let them go to bring the revenue down on you. Its just not worth it.


Hope this helps

dbran

Red_Marauder

Thanks for all the answers guys. Just to clarify, it isn't my company, I'm one of the employees! The employer said it was standard enough that employees might not be set up for tax by now.

I think the company is just going to go tits up and walk away from their tax commitments. Can the directors do this in a Ltd company? Is the responsibility theirs or that of the company, which may soon cease to exist?

J.Ryan

Employees can always contact the revenue under their own PPS to get Tax credits allocated to an employment, takes a day or two at the most.

Red_Marauder

All work has been 'suspended' and according to an email received by one creditor, 'staff costs have been eliminated' (first we heard of that). So I'm not sure if there is an employment still to register, but I will get back on to the revenue, who are already looking into the matter.

cena

I know a company that doesn't have a number Of employees Registered. They were in court for somthing I shall not say. But the Judge had ordered them too get everything in order with paye and prsi. He told them that they all have too be registered even if they work 3 hrs a week with them as it's the law. The judge was that happy that they paid the people into there hand. There back in court in 3 weeks. What sort of trouble could they be in if its not all in order

paul71

Red_Marauder wrote: »

Thanks for all the answers guys. Just to clarify, it isn't my company, I'm one of the employees! The employer said it was standard enough that employees might not be set up for tax by now.

I think the company is just going to go tits up and walk away from their tax commitments. Can the directors do this in a Ltd company? Is the responsibility theirs or that of the company, which may soon cease to exist?

Nothing standard about it at all. Have you been provided with payslips? If not then your employer has committed an offence under the payment of wages act.