Late or Incorrect Payroll Tax Filings? Here’s What Every Employer Should Know

Running payroll properly and on time isn’t just a box to tick, it’s a core responsibility for every Irish employer. But even with the best systems in place, mistakes can happen. You might miss a deadline, miscalculate tax or PRSI, or file something incorrectly. 

Even small payroll mistakes can snowball into serious issues. They don’t just cost money; they can damage your reputation, drain your team’s time, and erode employee trust. In this blog, we’ll walk you through what Irish law says about payroll compliance, how Revenue views these issues, and what you can do to stay on track.

Getting payroll wrong, or filing late, isn’t just a paperwork problem. It can lead to: 

• Financial penalties: Interest, surcharges, and fixed charges can build up fast.
• Reputational risk: In some cases, penalties may be made public.
• Operational burden: Fixing mistakes, dealing with audits, and resolving disputes takes time and effort.
• Employee impact: Errors can affect take-home pay, social welfare entitlements, and erode employee trust. 

Revenue expects employers to manage PAYE (Pay As You Earn), PRSI (Pay Related Social Insurance), and USC (Universal Social Charge) correctly. Errors can trigger audits, disrupt operations, and create long-term risks for your business. 

Here are common types of payroll-related non-compliance and the potential consequences under Irish law. 

Note: The actual penalty depends on the nature of the non-compliance, how long overdue, whether there was cooperation/disclosure, and whether the behaviour was careless or deliberate. Also, many penalties have mitigation provisions. 

hankfully, Revenue doesn’t take a “one size fits all” approach. Under certain conditions, penalties can be reduced. Key factors include: 

• Intent matters: Revenue categorises errors based on behaviour, from insufficient care to gross carelessness to intentional non-compliance. Whether it’s an honest mistake or something more serious affects how penalties are calculated.
• Voluntary disclosure: If an employer reports errors to Revenue before being prompted, penalties are often reduced.
• Co-operation counts: Quick correction, open communication with Revenue, and access to records can all help lower penalties.
• Size of the error: Minor underpayments or small omissions may attract lower penalties. In some cases, thresholds (known as de minimis) apply, as outlined by Chartered Accountants Ireland. 

Avoid stress, interest charges, and penalties by taking proactive steps: 

1. Keep accurate payroll records  - including employee data, hours worked, deductions, and benefits in kind.
2. Meet deadlines - use calendars or automated reminders to stay ahead of filing and remittance dates.
3. Use reliable payroll systems - choose providers who understand Irish PAYE, PRSI, and USC.
4. Review payroll processes regularly - conduct internal audits to catch errors before Revenue does.
5. Engage early with Revenue - if you spot an issue or expect delays, contact Revenue and consider making a voluntary disclosure.
6. Train your payroll team - ensure staff understand their responsibilities and stay up to date with compliance rules. 

You don’t have to do it alone, support is available. 

With staffing changes, manual processes, or tight deadlines, mistakes are understandable. If you’ve found a mistake: 

• Act quickly - delaying correction can lead to more interest and higher penalties.
• Document everything - gather records to explain what went wrong, why, and how you plan to fix it.
• Get expert help - speak to an accountant or payroll compliance specialist.
• Make a voluntary disclosure - ideally before Revenue contacts you. This can significantly reduce penalties. 

Revenue understands that mistakes happen. With strong systems, early action, and open communication, employers can reduce risk and stay compliant. 

Avoid sleepless nights over missed deadlines or miscalculations. SD Worx Ireland offers: 

• MegaPay - our secure, cloud-based payroll software built for Irish compliance. Get real-time updates and seamless Revenue integration.
• Outsourced payroll services - our experienced specialists handle everything from calculations to filings, so your team can focus on growing the business. 

With over 80 years of payroll experience across Europe, we know how to keep your business compliant. Whether you need powerful software or a fully managed service, SD Worx keeps your payroll accurate, compliant, and on time, every time.