Payroll year end can be a stressful time of the year for everybody involved. It is essential that you know your obligations as a payroll operator. This step-by-step guide should help you carry out the year end process smoothly and successfully.
1. Run your last pay period
The first step of the year end process is to carry out your last pay period of the year. There are in total 52 pay periods for weekly paying employers, 26 for fortnightly and 12 for monthly paid employees.
However for some employers whose first pay period falls on 1 January, they may have an extra pay period. Payroll operators should contact Revenue for further information on this.
2. Check your payroll records and finalise your figures
At year end, it is extremely important to check that you have a valid PPS (Personal Public Service) number and correct personal details recorded for each employee.
You should double check that your figures are correct and that all employees have been charged the correct amount of USC (Universal Social Charge), PRSI (Pay Related Social Insurance) and PAYE (Pay As You Earn).
3. Complete and file your annual return (P35)
The P35 return is an annual declaration to Revenue of PAYE, PRSI and USC for all employees who have worked with a company in that tax year. For employers who submit this return manually to the Revenue commissioner, this form must be submitted and any outstanding payments made by 15 February.
If you use ROS (Revenue Online Service) both to submit your return and pay the associated payment, you have an extended deadline of 23 February.
4. Give a P60 to your employees
Any employee still currently employed in the business as of 31 December must be given a P60. This report details cumulative earnings, PAYE, PRSI and USC for the tax year in question.
5. Obtain P2Cs in the new year
At the start of the new year, Revenue will issue new P2Cs or tax certs for all of your employees. If you are registered with ROS, you can log on and obtain these certs in your inbox.
They will be displayed in excel format. These certs hold updated information for the rates at which employees are charged PAYE and USC.
Final thoughts on payroll year end
By following these five steps, your payroll year end should run smoothly allowing you to plan for the coming year.
Making sure you’re on top of your payroll responsibilities is important for any business but payroll year end doesn’t have to be a stressful process if the right planning and procedures are put in place.
Editor’s note: This post was originally published in December 2013 and has been updated for accuracy and relevance.