Part 3: Important Year End items for employers/pension providers
- Data Alignment Project – updating of ‘W-numbers where new PPSN issued
- Employee Pension Contributions: Age-related percentage limits and earnings ceiling
- P35 Filing: feedback regarding issues that may need to be regularised before year-end
- Revenue Customer Service Unit Contact Details
As part of PAYE Modernisation, Revenue is updating a number of customer records in advance of the introduction of the new PAYE system from 1 January 2019.
W-numbers, which are PPSNs that include a ‘W’ as the second alpha character for example 1234567TW, are being updated where a new, distinct PPSN has been issued by the Department of Employment Affairs and Social Protection (DEASP).
Since September 2017, Revenue is identifying and replacing a significant volume of ‘W-numbers’ that have been replaced by new, distinct PPSNs. As the Revenue records are updated, we are writing to employees/pensioners to advise them to use their new, distinct (correct) PPSN in all future communications and to access our online services (ROS and myAccount). Registered customers can continue to use our online services, but need to remember to access the services using their new, distinct PPSNs.
Therefore, payroll/pension departments may notice an increase in the number of cases where PPSNs are changed on tax credit certificates, and should ensure that all relevant payroll records are updated to the new PPSN.
To assist payroll/pension departments, the tax credit certificate (P2C) will be updated to highlight cases where the PPSN has been changed. In such cases the P2C will issue under the new PPSN and the former PPSN (W-number) will also be referenced.
Tax relief in respect of employee contributions to a Revenue approved pension scheme is generally granted to the employee under the ‘net pay arrangement’. The employee’s gross pay is reduced by the amount of their pension contributions before tax deductions are calculated. There is no relief from USC or PRSI.
Some employees who are members of occupational pension schemes may also opt to make regular additional voluntary contributions (AVCs) from their salaries. Relief may also be granted by way of the net pay arrangement.
Employers must ensure that the combined contributions, normal contributions plus any Additional Voluntary Contributions do not exceed the following age based percentage ceilings and earnings ceiling:
|Age-related percentage limits|
|Age||% of Earnings|
|Under 30||Up to 15%|
|Between 30 & 39||Up to 20%|
|Between 40 & 49||Up to 25%|
|Between 50 & 54||Up to 30%|
|Between 55 & 59||Up to 35%|
|60 & Over||Up to 40%|
The annual earnings ceiling, which applies for the purpose of tax relief on contributions to pension products, is €115,000. Where an employee’s annual earnings exceed this amount, tax relief is limited to €115,000 x the age-related percentage.
Payroll/pension departments are reminded to ensure that the correct PPSN is used for their employees/pensioners. All employers/pension providers should have a P2C with the correct PPSN for all their employees or pensioners; and that PPSN should be subsequently used in completing the P35L detail.
Issues have arisen when, for example, an employee/pensioner changes from a ‘W’ number and has a new PPSN issued by the Department of Employment Affairs and Social Protection(DEASP) and Revenue issue a new P2C under the new PPSN. The employee’s/pensioner’s new PPSN should be recorded on the P35L. Where an employer continues to use a cancelled or incorrect PPSN on the P35L, this will cause delay in updating the individual employee’s or pensioner’s pay and PRSI information to the DEASP.
(ii)Local Property Tax (LPT)
Employers/pension providers are reminded to ensure that LPT is correctly deducted where instructed to do so by Revenue, and is subsequently included on the P35L. Updated P2Cs containing instructions about LPT deductions are issued by Revenue during the year, generally based on a customer’s instructions to Revenue. Accordingly, it is important that the latest P2C instruction relating to LPT deductions is used. It is particularly important to ensure that updated information about new PPSNs is used in order that the LPT deductions are correctly recorded on your employee’s/pensioner’s LPT payment record.
The Employer Customer Service Unit provides information and support to employers.
Contact details as follows:
MyEnquiries: Select ‘Employers PAYE’ in the ‘My Enquiry Relates To’ box.
Telephone: 1890 25 45 65 (+ 353 1 7023014) if ringing from outside the Republic of Ireland