PAYE Modernisation an Introduction

The PAYE Modernisation Project will involve the most significant reform of the PAYE system since its introduction in 1960.

Employers will need to calculate and report their employees’ pay and deductions as they are being paid - this can be better described as "Real Time Reporting"

This will make it easier to deduct and pay at the right time the correct amounts of:

  • Income Tax
  • Pay Related Social Insurance
  • Universal Social Charge
  • Local Property Tax.


The new real time reporting regime will be operational (and mandatory) for all employee payments being made from 1 January 2019.

PAYE Modernisation will eliminate the need to file/prepare the current P30s, P45s, P60s and P35s, but it will require employers to file a new online return known as a Payroll Submission for every pay period.

The Payroll Submission will contain the full details of each employees payroll for that payroll period - it is similar to filing a P35 for each payroll that you run and it will mean that Revenue will have a complete real time view of your Payroll.

Employers are required to file their Payroll Submissions "On or Before" payment is made to the employee.

You will be able to make your Payroll Submissions via ROS using one of two methods;

  • Direct Online Reporting from your Payroll Software to ROS using a new Web Service API being developed by Revenue.
  • Offline Reporting where you upload a file created by your software in a process very similar to how you would currently file your P35 in ROS


CollSoft Payroll 2019 will be fully compliant with the new requirements of PAYE Modernisation and will support both the Direct Online and Offline methods of making Revenue returns.

PAYE Modernisation will also see the current P2C replaced with a new file called an RPN (Revenue Payroll Notification) - but they are essentially the same thing. The RPN will provide you with the necessary information to calculate and deduct from the employee the correct amount of PAYE, USC and LPT.

Revenue will expect employers to check each employees RPN before running each payroll. CollSoft Payroll 2019 will facilitate this by downloading the current RPN directly from ROS at the start of each pay period, or you can import an RPN file that you have downloaded from ROS manually - either way you will be able to ensure that your payroll calculations are always based on the most up to date details from Revenue.

While PAYE Modernisation is going to introduce many improvements for Revenue, and some improvements for Employers, it is also going to provide some challenges to some employers.

Under the current system where employers only file a P35 once per year, it is possible for employers to operate their payroll in ways which are not strictly in accordance with the regulations, and then correct these issues after the year end while preparing the annual P35.

This will not really be possible under PAYE Modernisation as you will effectively be filing a P35 every week (or month etc) and therefore you will need to have all the details correct before you file.

PAYE Modernisation does allow you to make changes, however as this is a real time system Revenue will be monitoring the activity of individual employers and may intervene if they suspect that an employer is not following the regulations correctly.
Creation date: 17/07/2018 12:50     Updated: 17/07/2018 12:50
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CollSoft Ltd - PAYE Modernisation.pdf