PAYE Settlement Agreement for 2024

The deadline for making a PAYE Settlement Agreement (PSA) application to Revenue for 2024 is 31 December 2024 and the tax liability due under the PSA must be paid by 23 January 2025. 

What is a PAYE Settlement Agreement (PSA)?

 A PSA provides a practical solution for employers who provide employees with certain taxable non-cash benefits throughout the year but did not operate PAYE, USC and PRSI withholdings at the time of the award. 

PSAs allow employers to pay the tax due for minor benefits which are paid on an irregular basis, in one annual settlement.  The PSA allows employers to bear the cost of the PAYE, USC and PRSI due on these non-cash benefits themselves, without passing this on to the employee.

What can be included in the PSA?

In order to qualify for a PSA, the items to be included must meet all of the following criteria:

• Non-cash benefit
• Minor in nature and amount
• Irregular frequency 

If any of these criteria are not met, the taxable benefit must be taxed through the normal monthly PAYE return.

Some examples of taxable non-cash benefits that should be considered for inclusion in a PSA include:

• Staff entertainment which falls outside Revenue’s limited concession.
• Staff lunches / drinks / meals.
• Staff gifts / awards / prizes.
• Provision of taxis to/from work which fall outside of the exemption.

Note: the above is a not an exhaustive list.

It will also be necessary to consider the application of the Small Benefit Exemption (SBE) rules in 2024, which may impact the benefits that are included in the PSA. Therefore, the timing of when benefits were provided to employees during 2024 will be relevant.  Also, it is not possible for an employer to select which incentives they apply the SBE to.  For example, an employer cannot opt to tax the first and/or second benefit in a year to allow an employee to avail of the SBE  later in the year when further benefits of higher value are provided.

We have noticed that Revenue is focusing more attention on benefits provided to employees when carrying out PAYE interventions of businesses. Therefore, we recommend that if employers are considering making an application for the PSA for 2024, they start preparing well in advance of the 31 December deadline.

How can Forvis Mazars help?

We can assist employers with the following:

• Reviewing the benefits and expenses provided to employees in 2024 and identifying the benefits and expenses that should be included in the PSA.
• Preparing the PSA documentation and calculating the tax due.
• Advising on the tax rules related to the tax exemptions and Revenue concessions available on employee benefits and expenses.

If you have any questions in relation to the above, or if you would like to discuss this topic further, please contact a member of the Forvis Mazars employment tax team below.