This mandatory framework builds on existing payroll reporting obligations, necessitating a more detailed and timely disclosure of non-taxable benefits and expenses provided to employees and directors.

Understanding Enhanced Reporting Requirements (ERR)

ERR represents a landmark development in payroll and tax reporting, designed to enhance transparency, ensure compliance, and streamline the tax reporting process for employers. These regulations require a detailed breakdown of specific non-taxable benefits provided to employees and directors, paralleling payroll reporting. Employers must link payments to key identifiers such as the PPS number, date of birth, and Work ID of the employee.

Covered Payments under ERR

The Finance Act 2022, Section 897C, expands reporting obligations to encompass additional non-taxable payments made by employers to directors and employees (excluding contractors). Starting from January 1, 2024, the following three primary categories of payments fall under ERR:

Small Benefit Exemption ERR

What is it? Allows employers to reward employees with non-cash benefits, up to two benefits per year, not exceeding a combined value of €1,000.
Reporting Required: Employers must report the date and value of each small benefit, ensuring compliance with set limits.

Remote Working (E-Working) Daily Allowance ERR

What is it? Tax-free payment for employees working away from the company’s office(s), introduced during the pandemic at €3.20 per day.
Reporting Required: Employers must report the total number of days for which the allowance is paid, the amount for each day, and the date of payment.

Travel and Subsistence ERR

What is it? Covers payments for business-related travel and subsistence costs, vouched and unvouched, including site-based allowances, emergency travel, and eating on-site allowances.
Reporting Required: Employers must report the date and amount of each payment under this category, including detailed reporting for various travel and subsistence expenses.

Purpose of Enhanced Reporting Requirements (ERR)

ERR aims to enhance transparency and compliance with tax regulations, building on the PAYE Modernisation introduced in 2019. This detailed reporting enables Revenue to identify trends and anomalies, directing resources toward non-compliant employers. Additionally, it informs future tax policy, with the possibility of further reporting phases.
ERR submissions operate on a real-time reporting principle, requiring all information to be submitted before or on the same day as payment. SME owners may face operational challenges with multiple submissions in a month, necessitating new processes for accurate and timely reporting.

Submitting ERR Details

The Revenue Online Services (ROS) platform facilitates ERR submissions, similar to current payroll reporting systems. While third-party software providers work on integrating ERR requirements, manual filing on ROS remains an option.

Preparing for Enhanced Reporting Requirements (ERR)

To prepare for ERR, business owners can take practical steps:

ERR solely pertains to employer-made payments to employees or directors. Business expenses directly purchased by the company, such as through a company credit card, fall outside ERR's scope. This exemption can significantly reduce the reporting burden, especially for travel and subsistence expenses.
In conclusion, successfully navigating ERR demands proactive readiness, thorough system assessments, and a keen understanding of reporting intricacies.
If you would like to discuss how Borgo can assist your payroll operations, please feel free to contact our team of experts by emailing info@borgo.ie or by scheduling a call here.