Employer Reporting of Benefits: Enhanced Reporting Requirements (ERR)
Employer Reporting of Benefits: Enhanced Reporting Requirements (ERR)
Recent tax legislation has introduced a requirement for employers to notify Revenue of certain payments made to employees known as ‘reportable benefits’. The expected implementation date is 1 January 2024.
Which Benefits are Required to Be Reported?
Currently only the following tax-free payments or benefits made to employees are deemed ‘reportable benefits’ for the purpose of ERR:
- Small Benefits –Vouchers or benefits provided to employees which come within the ‘small benefit exemption’ regime. Up to two small benefits can be paid tax free each year which do not exceed an aggregate value of €1,000.
- Remote Working Daily Allowance –Where the employer makes a tax-free payment of €3.20 per day to employees for each day worked from home, subject to certain conditions being satisfied.
- Travel and Subsistence –Payments by employers to employees to reimburse business related travel and subsistence costs including:
- Vouched travel & subsistence
- Unvouched travel & subsistence e.g. civil service mileage rates
- So called “Country money” which applies in the construction sector
- Emergency travel
- Eating on site allowance
Revenue will require employers to report:
- Employee’s details,
- The amount paid and,
- In the case of the Remote Working Daily Allowance, the number of days.
There is no requirement to report details of an employee’s use of company fuel cards or credit cards. Only expenses detailed above will require reporting, for the moment in any case.
How Will the Information Be Reported to Revenue?
Employers will be required to report details of the non-taxable benefits outlined above in “real time”, i.e., on or before the actual payment to employees.
A Revenue Online Service (ROS) facility is being introduced to enable employers to submit, amend and correct enhanced reporting requirement data. Employees will be able to view information submitted by employers through their own “myAccount”.
Reporting will be separate from payroll submissions to ensure the integrity of payroll records.
How Can an Employer Prepare for Enhanced Reporting Requirements (ERR)?
Revenue have confirmed that this initial reporting requirement is only Phase I and that further employee payments and/or benefits are likely to come within the scope of EER in the coming years.
To prepare for the expected January 2024 implementation date, employers should:
- Review how they are currently collating reportable benefit information. Systems may need to be introduced where information is currently stored in a manual format;
- Consider how different departments in your business will collate the data, e.g., between HR and Finance Departments;
- Ensure that current internal IT systems will integrate with ROS;
- Assess the data quality;
- Ensure that approvers of claims forms are aware of these new requirements: and
- Consider whatever current payment timeframes may require consideration.
In advance of January 2024, the reimbursement of reportable benefits should be reviewed and updated where necessary to ensure current practices are aligned to legislation and Revenue guidance.
How Can PSC Help?
At PSC, we have extensive experience in employment tax matters. Contact us to discuss your Enhanced Reporting Requirements.