Almost 11,000 employees unexpectedly fall into emergency tax

Employees whose details are incorrect could pay 51% tax until they are updated

File photograph: iStock

File photograph: iStock


Almost 11,000 employees have received less than half of their gross pay so far this month because of changes to Revenue’s reporting systems, with accountants predicting this number could rise substantially. The shortfall comes as the workers unexpectedly fall into the emergency tax category because of problems with the PAYE records their employer has submitted to the tax authority.

These problems could occur where an employee’s records are not entirely up to date, for example where they have taken on a second job but their tax details have not been adjusted to reflect this.


Under a modernisation of its PAYE systems, Revenue required employers to submit a list of their employees with their details by the end of October last. Revenue said that so far, details for more than 820,000 individuals have been reported, with 10,660 employees seeing emergency tax of 51 per cent applied as a result.

The Association of Chartered Certified Accountants (ACCA) believes however that this number could rise as high as 120,000 this month, with Revenue’s figures reflecting only the first three working days of 2018.

Reasons for applying emergency tax include an employee not providing their employer with their personal public service number (PPSN), a person taking up their first ever employment in the State or where an employee’s details need to be updated.

“The implementation of emergency tax for employees that do not have the correct records will considerably reduce their disposable income, post-Christmas, when households are already very stretched,” said ACCA Ireland chairman Stephen O’Flaherty.

Correct online

If an employee’s information is wrong, they should correct it online, ACCA said, adding that it may take “some weeks” for the employer to refund the full amount of overpaid tax.

“The best advice for people in this position is to register on Myaccount on the Revenue website, if they have not already done so, and update their records as soon as possible as it is incumbent on them and not their employer to do so,” Mr O’Flaherty added.

As of January 1st, employers across the State were obliged to comply with the PAYE modernisation rules which involved the most significant reform of the system since its introduction in 1960.

Prior to the changes, employers logged payroll returns containing details of each employee’s tax and pay with revenue once a year, on a P35 return, the Irish Tax Institute noted in its guide for employees in advance of the deadline.

ACCA said in October it expects the new system to generate an additional €220 in tax per employer resulting from additional tax compliance across the State. This will boost Revenue’s tax take by about €50 million a year.