2018 Budget Measures - Payroll Focus

A synopsis of the Budget Measures announced for 2018 which are relevant to an employer's day-to-day payroll:


With effect from 01st January 2018, the minimum wage will increase as follows;
  • Experienced adult worker*; €9.55 per hour
  • Over 19 years old and less than 2 years since first job; €8.60 per hour
  • Over 18 years old and less than 1 year since began first job; €7.64 per hour
  • Aged under 18 years old; €6.69 per hour

*An experienced adult worker, for the purpose of the National Minimum Wage Act, is an employee who has an employment of any kind in any 2 years over the age of 18.


Budget 2018: USC Changes


Electric Vehicles
Electric Vehicles will attract a 0% Benefit in Kind rate for the 2018 tax year. Electric provided in the workplace for the purpose of charging the vehicle will be exempt from Benefit in Kind.

Share Based Remuneration – Key Employee Engagement Programme (KEEP)
Pending final approval, Budget 2018 introduces a KEEP initiative with an intended commencement date in 2018.
The proposal relates to the granting of share options by an unquoted SME to ‘key employees’. The deemed benefit derived from such a share issue will no longer attract income tax (PAYE, USC and PRSI) on exercise as they have done previously. Going forward the shares will be subject to Capital Gains Tax on disposal. Qualification of the share issue is subject to certain qualifying requirements (yet to be confirmed) throughout the option-holding period.


The National Training Fund Levy (NTFL) increases by 0.1% from 0.7% to 0.8% with effect from 01st January.
This NTFL is collected along with the Employers share of PRSI on Class A and Class H contributing employees. Therefore, the combined Employers PRSI rate increases by 0.1% for PRSI Subclasses A0, AX, Al, A1 and PRSI Subclasses H0, HX, H1.

Budget 2018: Amendments to Employer Rates of PRSI for increase to NTFL


The Employer’s PRSI Exemption Scheme, which was closed to new entrants since 01st July 2013, has reached maturity, therefore, PRSI subclasses A4, A6 and A7 are now discontinued.

Budgetary changes will be incorporated into CollSoft Payroll 2018. Employers should apply the 2018 Tax Credit Certificates for employees, where available, prior to processing payroll. Alternatively CollSoft Payroll will apply the Revenue guidelines where the P2C/Tax Credit Certificate is not available.

Relevant Links:
Department of Employment Affairs and Social Protection – 2018 PRSI Advance Notice
Revenue Commissioners - Budget 2018 Summary Leaflet

Creation date: 27/11/2017 12:10     Updated: 01/11/2019 15:02
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