Update on issue with RPNs that have very low (or zero) tax credits

Issues with RPN's that have zero or very low tax credits

Revenue have provided some clarification on this matter and we have posted a more detailed explanation of the issue here>>

In short this is an issue around the timing of the closing of a PUP claim.

Most employees who have returned to work this week with reduced tax credits should also still be receiving a PUP payment from Social Welfare which will more than offset the reduced tax credits.

Employers should be aware that there are currently around 479,000 employees on PUP, and most of these will have had their tax credits reduced.

As these employees return to work you should expect the credits to remain very low (or zero) for the first couple of weeks until the last PUP payment has been paid and the benefit is closed. Again, most of these employees will still be receiving a PUP payment in the interim even though they have recommenced employment.

Webinar on the topic of Employers Paying an Employees 2020 Tax Liabilities

We have uploaded a recording of this webinar to our Vimeo page at


The slides from the webinar can be downloaded here>>

Employers paying employees' 2020 tax liability

As we had previously advised Revenue will facilitate employers who wish to pay employees' 2020 tax liabilities. This applies to Income Tax (IT) and Universal Social Charge (USC) liabilities which arise due to the TWSS (and possibly PUP).

This is completely discretionary - employers are not obliged to make any such payments as the liability rests with the employee. However there are many employers who may want to make some contribution (either in part or in full) towards their employees liabilities arising from TWSS.

Revenue have published a brief guide to the process at https://www.revenue.ie/en/employing-people/twss/employers/index.aspx

CollSoft will be releasing an update to Payroll 2020 to facilitate such payments to be recorded and reported in the Payroll Software. We expect to have this update ready to release around 8th February.

This update will include a new Year End Adjustments Payroll Period where the user will be able to record such payments and report them to Revenue as an adjustment to their December Monthly Statement. Revenue will collect any payments through the December monthly statement and your employees final liabilities will be updated to reflect any payments made by the employer.

Over the last week we have been asked by many employers if there is a report in the Payroll software that can help them calculate the employee's liability. We are working on an update to add a report to Payroll 2020 that will help employers to estimate the tax liabilities that an employee has as a result of TWSS.

However, please be aware that such a report is only an estimate. It is impossible for CollSoft to perform the same calculations as Revenue because of the following reasons;

1) Employees may have been on both TWSS and PUP. Payroll will not know what PUP was paid and what PAYE is due from the PUP.

2) Many employees are jointly assessed with their spouses by Revenue. Therefore an employee's overall liability will depend on their partners own tax situation. Again Payroll cannot account for this.

3) The employee may have had multiple part time employments in which they were on TWSS and their final tax liability is a result of all the TWSS paid in these employments. Your CollSoft software will not have the details from those other employments.

If employers are going to be making payments towards their employees tax liabilities then they will have to engage directly with the employee to asses the actual liability.

Updated Guidance for the operation of BIK on Vehicles during the current Level 5 lockdown (Jan 2021)

Revenue are extending the short term concession whereby BIK on a company vehicle will not be applied in certain circumstances.

For more information please refer to the following information here>>

There are other concession that ended on 31st December just prior to the current Level 5 lockdown and these are also under review.

Getting started with Employment Wage Subsidy Scheme (EWSS) - Webinars

With the new lockdown there are many of our customers who are now looking to avail of the EWSS for the first time.

Some of you will have used the old Temporary Wage Subsidy Scheme (TWSS) between March and August of 2020 but never actually joined the new EWSS in September.

To help such employers we are hosting some webinars to discuss getting started with EWSS specifically. These will be geared towards explaining how EWSS works for those trying to use it for the first time. These webinars will include a presentation going over the basics of the scheme, followed by a demonstration of how to use EWSS in the Payroll software and finishing with an open Questions and Answers session at the end.

The first webinar will be tomorrow Friday 8th January at 3PM followed by another on Monday 11th at 11AM

You can register for the webinar at www.collsoft.ie/events

The slides for the EWSS Webinar can be downloaded here>>

We are currently preparing an FAQ document based on the questions that we are seeing on our helpline which will be published tomorrow.

Payroll 2021 in now available to download.

Payroll 2021 is now available to download from our website at www.collsoft.ie

We have published a video that shows you how to install the 2021 software onto your PC, and how to carry forward your companies and employees from Payroll 2020.

You can watch this video here>>

Important changes to the EWSS eligibility criteria for employers from 1st January 2021

The Finance Bill 2020 which is currently making its way through the Dáil at the moment contains a change to the eligibility criteria for all employers availing of EWSS after 31st December.

The eligibility will be based on the employers turnover/orders from 1st January to 30th June 2021 compared to the same period in 2019 (i.e. 1st Jan - 30 June 2019).

This is different from the eligibility periods currently used in EWSS.

Employers will need to check that they continue to be eligible under the new rules if they plan to use EWSS from 1st January.

Note: The legislation is still at committee stage in the Dáil so it has not actually been passed yet, and there is always the possibility that it will change between now and then.

Revenue announced that Employers will be allowed to make payments towards an Employee's 2020 Tax Liability

Revenue will facilitate employers who wish to make a contribution towards an employees' 2020 tax liabilities that have arisen due to the payment of TWSS in 2020.

Revenue will not apply the usual BIK rules to these payments but employers should be aware that these payments would not be regarded as wholly and exclusively incurred for the purposes of the employer’s trade or profession, and therefore they will not receive a deduction for corporation tax purposes.

If employers wish to make a payment towards their employee's 2020 tax liability then they will need to engage directly with the employee in order to determine the amount of PAYE and USC that is being paid. Revenue will issue employees with a Preliminary End of Year Statement in the middle of January 2021 which will help in this regard.

There are two methods by which the employer can make a payment towards the employee's tax liability;

  1. Make a payment directly to the employee - the employee must then pay their tax liability using RevPay in myAccount
  2. The employer can amend their last 2020 Payroll Submission to report the amount of PAYE and USC being paid. This will trigger a revised Monthly Statement for December and the money will be collected by Revenue in the normal manner.

We think that the second option is the best method to use as the employer can guarantee that the money is actually paid to Revenue. As such we will be releasing an update to the 2020 software which will enable employers to report these payments in a special Payroll Run. This update will be made available in January 2020.

Employers will have until the end of June 2021 to avail of this facility and they will be required to keep some documentary proof showing the engagement with the employee and the arrangements agreed in order to undertake these payments.

More information is available on the Revenue website at


TWSS Reversal Tools added to Payroll

Some employers are now in the process of repaying TWSS back to Revenue along with any PRSI that would have been paid if TWSS was not used. For some this is a voluntary process, for others they have been advised that they were not eligible for all or part of the time that they were using TWSS.

We have added a wizard which recalculates the amount of PRSI that would have been paid and prepares some reports that can be sent to Revenue for approval.

We are still working on a tool that will also allow you to adjust the insurable weeks to take the J9's off the employees record - this will be available as part of our Year End update.

We have more information available here>>

Revenue Employer Notice regarding TWSS Reconciliation Process

Employers who were operating TWSS will have received an Employer Notice via their ROS Inbox this morning discussing various aspects of the TWSS reconciliation process.

This is a generic notice and is being sent to all TWSS employers to remind them that the deadline for reporting all TWSS payments made to employees is the 31st October. They have however recognised that due to the current Level 5 shutdown some employers may not be able to meet that deadline, but they are requesting that everybody makes their best effort to do so.

We would just like to remind our customers that as long as you have installed one of the latest versions of our software (Build 145 or higher) then the software will warn you if you have any outstanding payments to be reported.

At this stage it looks like well over 95% of TWSS payments made through CollSoft Payroll have already been reported to Revenue, so as long as you have updated your software there is nothing for you to worry about.

Revenue have announced changes to the way EWSS will be paid to employers

Revenue will be changing the way that EWSS is paid to employers early in November so that EWSS payments will be paid on a daily basis. This will be similar to how TWSS was paid where an employer usually received payment within 48Hours after making a Payroll Submission to Revenue.

Revenue have indicated that they expect these new daily EWSS payments to start around the 9th November.

The official press release reads as follows;

"Frequency of EWSS payments

The EWSS was originally designed to pay the subsidy due once a month in arrears as soon as possible after the due date of the relevant monthly Employer PAYE return (the 14th of the following month).

On 6 October 2020, Revenue announced that it had brought forward the date for EWSS payments to the fifth day of the following month. October EWSS payments, including the increased rates announced by the Minister for Finance in respect of payroll submissions with pay dates on or after 20 October 2020, will be paid by 5 November 2020.

Revenue is currently working to further significantly shorten the EWSS payment timeframe. In this regard, the first EWSS payments in respect of November payrolls will be made in early November, rather than by 5 December. Thereafter, subsequent payments for November will be paid following the receipt of a payroll submission containing an EWSS claim. This means EWSS will be paid on a similar basis to the Temporary Wage Subsidy Scheme (TWSS), providing a significant positive cashflow boost for businesses.

Finally, due to the current Level 5 public health restrictions, employers who previously did not qualify for EWSS may now be able to show the necessary 30% reduction in turnover or customer orders between 1 July and 31 December 2020. Revenue is reminding employers that it is still possible to register for EWSS once all qualifying criteria are met. Once registered, employers can then claim subsidy payments in respect of payroll submissions with a pay date on or after their registration date."

Note: We appreciate that over the last number of days many customers have asked us if Revenue were going to make any changes in this area, and we advised them that Revenue were still going to pay a month in arrears. We had asked Revenue for clarity on this matter (as well as others) on Monday night and we were told on Tuesday morning that it was definitely not going to change - but now they have. I know many employers are trying to decide if they should use EWSS or lay staff off for PUP, and this particular issue of cash flow is a large factor in making that decision.

We are trying to ensure that we always give you the most accurate answer, but sometimes the official position of government will change without much notice.

New EWSS rates effective from 20th October

The Government have confirmed that the new increased rates of EWSS will apply to all wages submitted with a Payment Date on or after 20th October, including any such wages that were submitted to Revenue before the announcement last night. (New rates listed below)

So any wages submitted to Revenue with a payment date of the 20th October or later will have the subsidy paid at the new rates.

As far as we can tell, if you are running a monthly payroll dated after the 20th October, you will receive a full month at the higher rates.

CollSoft Webinars

We have scheduled a webinar to discuss the changes to EWSS for Wednesday afternoon, and there is another webinar to discuss the TWSS reconciliation process on Thursday morning.

You can register for the webinars on our website at https://www.collsoft.ie/events

Do I need to update my Payroll?

Yes and No!!!

EWSS continues to apply where Gross Pay is between €151.50 and €1462 per week. This has always been the case since EWSS was introduced on 1st September 2020, and CollSoft uses these values to apply for the subsidy.

The way the system works is that when the Gross Pay is within the range valid for EWSS the software sets an "EWSS Flag" that indicates to Revenue that the employee is eligible for EWSS. The payroll software does not tell Revenue what that amount of subsidy is, Revenue actually calculate it themselves on ROS - we just set the "EWSS Flag" for Revenue.

Revenue will calculate your subsidy based on the payment date of your payslips, and will apply the new rates automatically to any payslip with a payment date on or after the 20th October.

So, anybody who was submitting payslips today will have their subsidy calculated at the new rates, and even if you submitted your wages earlier in the week for any payment date from 20th, you will also get the new rates.

But there is one problem:

The subsidies reported in CollSoft Payroll will be showing the old rates, and indeed the current reports on Revenue will also be showing the old rates.

CollSoft will issue an update by next Monday to update the reports to the new rates, and this will fix any amounts that have been reported incorrectly in the software.

The main thing to remember is that even if you are using the old software, you will still get the updated rates from Revenue when they pay your subsidy.

The new rates for EWSS from 20th October are as follows;

Creation date: 20/10/2020 16:23     Updated: 05/02/2021 16:06
CollSoft Year End Presentation.pdf