Navigating Payroll Compliance: Essential Tips for Irish SME

If you have been an SME decision-maker, you’ll know that there are countless daily, monthly, and annual tasks which need your constant attention Ensuring customer satisfaction, keeping up with bills, making sure your staff and content at work … the list of business challenges goes on. Managing payroll for SMEs is one such task. 

It’s one of the biggest challenges that you face in an SME regarding compliance. At SD Worx, formerly Intelligo, we have decades of experience helping SMEs establish effective, reliable payroll processes. We know exactly how you can stay payroll compliant the simplest way possible.

 

Payroll compliance in Ireland consists of several steps that, when followed, ensure you’re operating above board and in a compliant manner. Your payroll compliance checklist should look like this:  

1. Registering as an employer: To pay staff, you must register as an employer with Revenue. While this is a relatively straightforward process, you must provide the required business information and obtain a tax registration number. 
2. PAYE registration: PAYE (Pay As You Earn) is used to collect income tax and other deductions from your employees' wages. You must register your employees for PAYE and deduct the appropriate taxes. 
3. Reporting payroll information: To remain payroll compliant, you must report employee wages and deductions to Revenue regularly.
4. PAYE returns: You must submit monthly PAYE returns to Revenue that include the total tax liability. 
5. Tax deductions: As an employer, you’re responsible for deducting income tax, Universal Social Charge (USC), and Pay Related Social Insurance (PRSI) from employees' wages. Again, these deductions must be sent to Revenue. 
6. Employee benefits: Certain benefits, e.g., medical insurance and pension contributions, provided to employees may be subject to tax. These should be included in your payroll calculations.
7. Maintaining payroll records: Maintaining accurate and up-to-date payroll records is essential to remaining compliant. Information such as employee wage and tax deductions should be retained for a specified period as per legal requirements. 

Related Guide: Payroll Compliance: How to Avoid Breaches

 

While keeping this checklist in mind will go a way towards ensuring you’re keeping compliant, there are many other areas of payroll compliance which an SME might struggle to easily deal with. Typical uncertainties include managing payroll for part-time employees, keeping track of updates in regulations, or ensuring accurate record-keeping.

One such issue might centre around the process of setting up new hires correctly with the documents they need. When you hire new staff, you must provide them with a written statement of the core terms of employment within their first five days. You also need to give them a written statement of the remaining terms within one month of their start date.  

When it comes to rates of pay, employees (full-time and part-time) generally receive at least the minimum wage of €13.50* per hour. However, rates differ depending on the employee. People aged under 20, apprentices, and people employed by close relatives may receive a different rate. You also need to factor in tax Universal Social Charge (USC), and PRSI when calculating pay.   

Keeping up to date with changing regulations can be difficult. Of course, you don’t need to worry about this or maintaining accurate records if you use reliable payroll software such as MegaPay which stays on top of changing payroll rules.

MegaPay integrates with many HR systems so that HR data can flow seamlessly into payroll. It also allows you to create ad-hoc reports whenever you need them. And should you need help with anything unexpected, we have a dedicated and skilled Integrations Team to offer you guidance.

Related article: Payroll Productivity Checklist: How To Overcome Key Blockers to Efficient Payroll

 

When remaining compliant with payroll regulations, policies and procedures can make all the difference. When devising payroll policies and procedures, you should account for:

• Pay periods: Outline the frequency of employee pay (weekly, bi-weekly, monthly).
• Timekeeping: Timekeeping will help you accurately track employee hours.
• Overtime: Set out guidelines for calculating and compensating overtime.
• Employee leave: Leave policies will help you manage employee entitlements.
• Expenses: Expense procedures will help employees claim work-related expenses.

 

Disclaimer: The information provided is based on the details released in Ireland's Budget 2025. The policies and changes mentioned are as announced by the Irish government and may be subject to further adjustments or updates. For the most current and comprehensive information, please refer to official government sources or publications.

The best payroll software for small businesses in Ireland is the one that aligns with your needs.

Lucky for you, SD Worx, formerly Intelligo is the creator of Ireland’s most widely used payroll software, MegaPay. We’re also part of Europe’s leading payroll and HR solutions provider, so you can rest assured that MegaPay Outsourced is the best outsourced payroll software solution for your business. 

Thanks to our strong relationship with the Payroll Software Developers Association (PSDA), we ensure our processes are compliant with Irish payroll rules and regulations. An automated payroll system such as MegaPay ensures payroll compliance by adhering to Irish payroll legislation, meaning your payroll is always above board and expertly managed. 

To find out more about our automated payroll system MegaPay and guarantee your payroll processes are compliant with Irish payroll regulations, talk with us today!