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INTRODUCTION TO PAYROLL 2018
By Noel Murphy
The following is a brief introduction to payroll including how to register the business and employees, how best to operate a payroll system and details of what Revenue returns are required.
Registering as an Employer
The first step in registering employees is to register the business as an employer. This is usually done when first registering for tax by submitting either Form TR1 (sole-traders and partnerships) or Form TR2 (companies) to the local tax district. Tax registrations are now mostly completed online using the Revenue Online Service - ROS at www.revenue.ie.
Registering as an Employee
The onus on the employer now is to advise all new employees that they need to register as employees with ROS on their own "My Account" so therefore they should provide them with the business tax registration number to do this. They will then receive their tax credits and cut-off figures.
The following Low Pay Commission recommendations were implemented from January 1 2018:
Experienced adult worker €9.55 per hour
Over 19 and less than 2 years since first job €8.60 per hour.
Over 18 and less than 1 year since began first job €7.64 per hour.
Aged under 18 €6.69 per hour
An experienced adult worker, for the purposes of the National Minimum Wage Act, is an employee who has an employment of any kind in any 2 years over the age of 18.
Of course the national minimum wage does not stop an employer from offering a higher wage.
How to calculate the hourly rate
Under the National Minimum Wage Act 2000, the basic method of calculation is to divide the gross pay by the total number of hours worked. It is necessary to note what pay is taken into account, what hours are included as working hours and what is the pay reference period i.e. over what period the calculation is made.