Insufficient Wages or Salary in a pay period (negative net pay)
Where an employee's PAYE, USC and PRSI liabilities in a pay period are greater than his net pay, i.e. the employee had insufficient net pay to cover the deductions (negative net pay), the employer must still return and pay the correct amount of PAYE, USC and PRSI in the subsequent P30 to Revenue.
The employer must then make arrangements with the employee to recover the PAYE, USC and PRSI liability from the employee either in the subsequent pay period or over a number of pay periods.
Where this situation occurs the upfront payment made to the Revenue on the employee's behalf is not regarded as a preferential loan for Benefit In Kind purposes. This is provided the amount is recovered in full from the employee, by 31st March in the subsequent tax year.
If the employee has not repaid the total liability to the employer by the 31st March then the uncollected balance is regarded as a preferential loan and is subject to the Benefit In Kind rules applying PAYE, USC and PRSI on the monetary balance of the liability as at 31st March.
The employer must then make arrangements with the employee to recover the PAYE, USC and PRSI liability from the employee either in the subsequent pay period or over a number of pay periods.
Where this situation occurs the upfront payment made to the Revenue on the employee's behalf is not regarded as a preferential loan for Benefit In Kind purposes. This is provided the amount is recovered in full from the employee, by 31st March in the subsequent tax year.
If the employee has not repaid the total liability to the employer by the 31st March then the uncollected balance is regarded as a preferential loan and is subject to the Benefit In Kind rules applying PAYE, USC and PRSI on the monetary balance of the liability as at 31st March.
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