What payments are affected?
In the first phase of the new regime, three non-taxable benefits are included—travel and subsistence payments, the remote working daily allowance, and benefits falling under the Small Benefit Exemption scheme.
Examples of travel and subsistence payments that fall under the new rules include the reimbursement of any of the following expenses:
Travel (vouched) – reimbursement of fuel expenses
Travel (unvouched) – paid mileage for business journeys
Subsistence (vouched) – reimbursement of meal/lunch expenses
Subsistence (unvouched) – paid daily subsistence rates
Site based employee allowance (including “Country Money”)
Emergency travel allowance
Eating on-site allowance
ERR also applies to the €3.20 daily remote working allowance and to benefits provided under the Small Benefit Exemption Scheme.
If your employees receive benefits in any of the categories mentioned above, you must report this to Revenue via ROS in real time.
How will ERR affect my payroll?
For each payroll run in 2024, as well as your Payroll Submission Request (PSR), you must submit an ERR for expenses and benefits that fall within the scope of the new requirements. The report must be submitted to Revenue via ROS in real time which means reporting to Revenue on or before the date on which you pay the benefit to your employees or directors. As this will involve some additional administration, it will be important to collect the required information and communicate it to your payroll administrator on a timely basis so that they can submit the required report to Revenue. Keep in mind that your payroll administrator can only assist you in reporting the required information if they are aware that you are making payments that fall within the scope of the new rules.
Note that ERR reporting will be separate from payroll submissions to ensure the integrity of payroll records. Employees will be able to view the ERR information submitted by their employer through their myAccount.
Benefits that are not reportable
Certain 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.
What do I need to do now?
If you haven’t already done so, now is the time to review your policy on the reimbursement of reportable benefits and make sure that your current practices comply with the new requirements. This is important as ERR will provide Revenue with increased visibility of tax-free amounts being paid to employees along with data capable of being analysed for compliance interventions.
How can ifac help?
At Ifac, we have extensive experience in employment tax matters and can help you comply with your ERR obligations. For further information and/or assistance, please contact us on 1800 714 050 in the first instance.