Year end - Revenue update for Employers and Employees, changes for 2018 you may need to know about

Universal Social Charge (USC)

As announced in Budget 2018, the rates and thresholds of the USC are changing with effect from 1 January 2018. The USC information on our website - in 'Jobs and Pensions' and 'Employing People' - has been updated to take account of these changes.

2017 Employer Tax Credit Certificates (P2Cs)

Revenue will cease issuing 2017 P2Cs with effect from 1st December 2017.  An exception to this will be for employees/pensioners commencing employment or pension, where the commencement is notified to Revenue in the period from 1st December to 31^st December. Revenue will continue to issue P2Cs through ROS to employers/pension providers until the end of December 2017.

2018 Employer Tax Credit Certificates (P2Cs)

In December, Revenue will issue 2018 P2Cs to employers/pension providers for all employees/pensioners, advising the rates and thresholds applicable from 1st January 2018.

Revenue is requesting that employers/pension providers, where possible, hold back running 2018 payrolls until they receive the 2018 P2Cs.

In the situation where an employer/pension provider has not received 2018 P2Cs in time to run January/February 2018 payroll(s), employers/pension providers should continue to use the 2017 P2Cs for tax deductions. The USC information on our website - see 'Employing people' - includes updated guidance.

Employers/pension providers should take care when uploading the 2018 P2C data so as not to upload it to 2017 payroll in error. The ROS mail notification about the 2018 P2Cs will explicitly reference that they are 2018 P2Cs.

Changes to Form P45 for 2018

The paper Form P45 will be updated for 2018 to remove all references to Illness Benefit. The updated paper P45 will be available to non-ROS employers from early December 2017 and can be ordered from: Email: custform@revenue.ie.

Taxation of Illness Benefit and Occupational Injury Benefit from 1st January 2018

Currently employers and pension providers are required to include with taxable pay, all taxable Illness Benefit and Occupational Injury Benefit payments paid to employees/pensioners by the Department of Employment Affairs and Social Protection (DEASP).

With effect from 1st January 2018, this is no longer the case. From that date Revenue will incorporate the taxable element of Illness or Occupational Injury Benefit into employees'/pensioners' tax credit certificates. This will have the effect of reducing employees'/pensioners' available tax credits and/or rate bands. Their USC rate bands will not be affected.

Department of Employment Affairs and Social Protection to cease issuing Illness Benefit and Occupational Injury Benefit Notifications to Employers/Pension Providers.

The Department of Employment Affairs and Social Protection (DEASP) has advised that, from 1st January 2018, it will cease issuing Illness and Occupational Injury Benefit notifications to employers/pension providers. These notifications were issued to employers/pension providers to assist them in calculating their employees'/pensioners' tax. As Illness Benefit and Occupational Injury Benefit will be incorporated into employees'/pensioners' tax credit certificates from 1 January 2018, employers/pension providers no longer require these notifications to calculate their employees'/pensioners' tax.

Any queries in relation to Illness Benefit payments should be directed to the Department of Employment Affairs and Social Protection. Any queries in relation to taxation should be directed to Revenue.

The ROS version of the P45 is not changing for 2018. Where a figure is inputted in the Illness Benefit field a pop-up message will advise that this field may only be populated if the cessation date is before 1st January 2018.