02 Jul, 2024

Paying Expenses: A Guide for Employers

Since the introduction of Enhanced Reporting in January 2024, Revenue has complete visibility of expenses paid. This increased transparency means that discrepancies or non-compliance can be more readily identified during audits, making it even more critical for employers to adhere strictly to the guidelines.

Ensuring compliance with Revenue regulations is now more crucial, as any tax-free payments made to employees and directors are closely scrutinised as Revenue has sight of before any Revenue enquiries and audits.

Employers can either pay the applicable mileage and subsistence rates or reimburse employees for actual costs incurred. However, it is essential to note that employees cannot claim both, the so-called double dip. The responsibility for making correct payments lies solely with you, the employer, and any tax risk from inappropriate or excessive payments rests entirely with you.

There are different allowances are available depending on the duration of an employee's absence from their "normal" place of work. For instance, day allowances cover meal costs, while overnight rates reimburse accommodation expenses. Special rules apply to site-based employees and hauliers, with stringent interpretations of what constitutes a "normal place of work."

Revenue’s view is that employers should not pay unvouched expenses to directors or employees, such as agreeing to pay the same amount of expenses each week without proper documentation. In the event of an audit, Revenue would seek to tax such payments.

As an employer, you need to stay informed and ensure compliance to avoid potential tax risks. Failure to comply can result in significant penalties and increased scrutiny from Revenue authorities. For more detailed information, it is recommended that you contact the Payroll team if we look after your payroll or your local office.


Mary McDonagh

Talk to Mary McDonagh

Head of HR & Payroll Services1800 714 050marymcdonagh@ifac.ieLinkedin