From 1 January 2024, you must report to Revenue details of any payments you make to your employees and directors under the following three categories of non-taxable benefits:
Small benefit exemption
Remote working daily allowance
Travel and subsistence
You are required to submit your ERR return electronically in real time. This means Revenue should receive the report on or before the day on which you make the payments.
How will this affect my payroll?
ERR will introduce some additional administration. For each payroll run in 2024, as well as your Payroll Submission Request (PSR), you will have to submit an ERR for any expenses that fall within the scope of the new requirements.
What information does Revenue require?
As mentioned, ERR Phase 1 applies to three ’reportable benefits’:
1. Small benefit exemption
Since January 2022, employers have been able to reward employees with up to two small benefits each year. These non-cash benefits are tax free and must not exceed a combined total of €1,000 in value. From 1 January 2024, employers must report to Revenue, the value of benefits paid to each employee under this scheme.
2. Remote Working daily allowance
Employees working from home may incur additional heating, broadband and electricity costs. You can pay your employee up to €3.20 a day to help with these expenses. This payment is exempt from tax, PRSI and USC, however the value of benefits paid to each employee under this scheme must be included in your ERR return from 1 January 2024.
3. Travel and subsistence
If your employees travel for business or work away from base, you can reimburse their travel expenses. You can also pay subsistence expenses to cover the cost of staying in a hotel or the cost of a meal while they are working away from base. From 1 January 2024, your ERR report must include details of the following items and amounts paid to each employee and/or director:
Travel (vouched and unvouched)
Subsistence (vouched and unvouched)
Payments to site-based employees (including “Country money”)
Emergency travel
Eating on site allowance
For all three reportable benefits, your ERR return will need to include the employee’s details, the amount paid, the date paid and, in the case of the Remote Working Daily Allowance, the number of days the employee worked remotely.
Why is this information required?
ERR will give Revenue greater visibility of the tax-free benefits being paid to employees. Revenue say they intend to use this information to target audit resources where the highest risks of non-compliance arise.
In addition, Revenue say that ERR will:
enhance Revenue’s Compliance Intervention Framework by directing resources away from compliant employers
provide quality high level data in support of effective and informed policy decisions by the Department of Finance
increase visibility and assurance for employees in relation to non-taxable payments.
Benefits that are not reportable
Benefits such as the use of company credit cards or prepaid cards are not currently within the scope of ERR. Likewise, payments for fuel cards, toll tags, car insurance, and motor tax fall outside ERR as these payments are paid to third parties rather than to your employees or directors.
Workers other than employees and directors
ERR only applies where workers fall within the definition of an employee or director as set out in tax legislation.
How to prepare for ERR
You will need to review your policy on the reimbursement of reportable benefits to ensure that your current practices align with the relevant legislation and Revenue guidance. Keep in mind that as the enhanced reporting requirements that come into effect on 1 January 2024 represent only Phase 1 of ERR, further employee payments and/or benefits are likely to become reportable in the coming years.
Information sessions
Revenue (via ROS) is running information sessions on ERR to help employers with the new requirements. These sessions will give an overview of what you need to report. The presentations will cover:
requesting Employer Reporting Notifications by file upload
submitting expense/benefit details by file upload or by online form
viewing expenses/benefits by submission type, and
employees view of submissions made by their employer in myAccount.
These sessions are running until mid-November. Revenue will issue a link to employers via Eventbrite where you can register your interest in attending one of these free events.
How can ifac help?
ERR will introduce a new layer of complexity and increase the administrative burden for employers. At Ifac, we have extensive experience in employment tax matters and can help you prepare for this new reporting requirement. Please contact us on 1800 714 050 for further information.
