Taxes Consolidation Act 1997 section 985B

PAYE settlement agreements

Section 985B allows Revenue to enter into PAYE settlement agreements with employers, enabling them to pay tax directly on minor and irregular non-monetary benefits provided to employees, rather than accounting for it through the PAYE system.

• Revenue may agree that an employer pays tax directly on qualifying emoluments, being minor non-monetary benefits provided at irregular intervals, removing them from the PAYE system entirely
• The tax payable is calculated by reference to the aggregate value of the benefits, the number of employees involved, their tax rate profiles, and includes a gross-up element for the tax-free advantage to the employee
• Where an agreement is in place, the benefits are excluded from the employee's total income, the employee receives no credit for the tax paid, and the emoluments need not be included in the employer's payroll return
• The employer must apply to Revenue by 31 December in the relevant tax year, and must pay the agreed tax within 23 days of year end or the agreement becomes void