IPASS Conference 2024 Updates
The IPASS Conference 2024 discussed some significant updates to Ireland's employment landscape, particularly with the introduction of the Auto Enrolment Retirement Savings System set to go live in Q1 2025. This system is expected to auto-enroll around 800,000 workers, ensuring broader retirement savings coverage. Additionally, changes in PRSI rates, enhanced reporting requirements, and new guidelines for share-based remunerations are on the horizon. Employers and employees alike must prepare for these upcoming changes to navigate the evolving regulatory environment effectively. Here we’ve put together some of the most important highlights from IPASS 2023:
Auto Enrolment Retirement Savings System
Timeframe
Q2 2024 Enactment of Legislation
Q2/Q3 2024 Establishment of National Automatic Enrolment Retirement Savings Authority
Q1 2025 Go Live and first contributions taken
Who will be auto enrolled
An estimated 800,000 workers
Including employee on probation, casual, seasonal and part-time staff
Aged between 23 and 60
Earning over €20,000 per year across all employment
Those excluded are: the self-employed, Non Earners, and Existing member of occupational schemed and PRSA’s
What are the contribution rates
| Year of the auto-enrolment scheme | Employee Contribution Rate | Employer pays |
|---|---|---|
| 1 to 3 | 1.5% | 1.5% |
| 4 to 6 | 3% | 3% |
| 7 to 9 | 4.5% | 4.5% |
| 10 and after | 6% | 6% |
What are some other key features
Pot follows employees across jobs through their working life
Employees will be automatically included in the scheme but can opt out after 6 months and receive a refund of their Employee contributions only.
Employer will continue to pay contribution even if the employee has opted out.
Employee will be automatically enrolled again after 2 years
Global Mobility Updated
Non resident employees of Irish private sector employers who exercise employment duties both inside and outside the state.
Example:
An employee who is resident in Northern Ireland who works from home 2 days a week and in the office in the ROI 3 days a week
ROI employer is obliged under s.985 TCA 1997 to withhold PAYE from all emoluments from the employee.
Under article 15 of the Ireland/UK DTA, as an NI resident, employment income may only be taxed in the ROI by reference to employees’ level of ROI workdays for a year (ROI tax is not due on days worked from home in NI)
If ROI PAYE is withheld in full on employee’s employment income the employee must submit an income tax return to Revenue to seek a refund of ROI tax withheld on days worked from NI.
Irish employer can apply for a section 984 direction from Revenue which authorises them to withhold ROI PAYE on only days worked in the ROI
Shared Based Remunerations
Finance (No. 2) Act 2023 amended the taxation of rights to acquire shares or other assets taxable under s128 TCA 1997.
As a result, the taxation of gains realised on exercise/assignment/release of an option to acquire shares or other assets has moved from self-assessment to PAYE- system on gains realised on or after 1st January 2024
Currently employers may avail of an employer PRSI exemption on shared based remunerations. However, Exemption is not automatic.
· Shares must be in the employers company or a company that controls that company
· Exemption does not apply to cash-settled awards or any cash payments that follows the value of shares
Enhanced Reporting Requirements ERR
Failure to comply with the new rules can result in penalties. Revenue is taking a “service for compliance” approach up to 30 June 2024 - i.e. a softening of penalties with no formal compliance interventions until then.
PRSI Changes 2024
Changes to PRSI for people aged between 66 and 70
Prior to 1st January 2024 a person who was an employee or a self-employed person and was ages 66 or over, did not have to pay PRSI on their income.
Following the government decision to introduce optional deferral of State Pension (Contributory), legislation was enacted to change the upper age limit for exemption from PRSI from 66 to 70 years old with effect from 1st January 2024. This applies to both employer and employee liability.
These changes will apply to all persons with the Exception of two categories:
People who are in receipt of State Pension (Contributory). Once SPC is in payment the person’s earnings are not subject to PRSI.
People who have already reached 66 years of age by 1/1/2024 i.e. those born before 01/01/1958
PRSI Rates Increases
Following Government decisions to ensure the long-term sustainability of the social Insurance Fund and to keep the State Pension age at 66. It was decided to increase all PRSI rates as follows:
2024 – 0.1% will increase 1st October 2024
2025 – 0.1%
2026 – 0.15%
2027 – 0.15%
2028 – 0.20%
PRSI Employers Threshold changes
From the 1st October 2024 the Employers PRSI Threshold will increase from €441 to €496 per week – class A only.
Statutory Sick Leave
No further updates and the below still applies:
2024 – 5 days
2025 – 7 days
2026 – 10 days
Gender Pay Gap Reporting
Gender Pay gap reporting is required for companies as follows:
2024 - companies with over 150 employees
2025 - companies with over 50 employees
Deadline for reporting is December (6 months after chosen snapshot date which can be any date in June each year)
It is intended that from 2025, the annual reporting deadline will move from December to November which means that organisations will only have 5 months from their snapshot date in June to report on their gender pay gap
Parental leave
Will increase from 7 weeks to 9 weeks from August 2024.
Determining Employment Status in Ireland
Revenue recently released new guidance regarding Self employed v Employee status.
If you would like to discuss any of the above in detail please contact Phil in our payroll department.