Types of expenses employers will need to report from January 2024

From the 1st of January 2024, the introduction of Section 897C of the Taxes Consolidation Act 1997 into The Finance Act 2022 will require employers to report details to Revenue of certain non-taxable payments made to employees. Revenue is calling this Enhanced Reporting Requirements (ERR).

Which types of expenses will need to be reported?

Where employers make a tax-free payment for one or more of the expenses and benefits listed below, they must submit the details electronically to Revenue. This submission must be made on or before the payment date.

1. Travel and Subsistence

When an employee (including directors) is required to travel on business journeys, the employer may choose to cover their travel and subsistence costs.

Travel costs may include covering the cost of flights, taxis, or public transport. Employers may also repay employees for use of their private cars, motorcycles or bicycles, when used for business journeys.

An employee may also incur subsistence expenses if working away from their normal place of work, for example, accommodation and food expenses.

These are the types of travel and subsistence expenses which must be reported when a tax-free payment is being made:

Travel Vouched
Travel Unvouched
Subsistence Vouched
Subsistence Unvouched
Eating on site
Site based employees (includes “Country Money”)
Emergency Travel

Vouched expenses are those for which supporting documents or receipts are provided as evidence. Unvouched expenses, on the other hand, are when there were no receipts or other supporting documents provided.

‘Eating on site’ and expenses related to site-based employees, are most common in the construction industry, and is where employees may be required to work at different sites or locations. Travel and subsistence may be paid tax free to a site-based employee, up to a certain amount, if they meet Revenue’s conditions.

2. Small Benefit

The next type of benefit you must report the details of to Revenue under ERR are referred to as small benefits.

Since January 2022, employers have been allowed to give employees up to two, tax-free, small benefits each year with up to a combined value of €1,000.

These benefits are usually given in the form of a voucher, which can be used to purchase goods or services, or it could be a tangible item. Small benefits cannot be redeemed for cash, and it is only the first two benefits given in a tax year that are tax exempt.

3. Remote Working Daily Allowance

The last tax-free expense you must report to Revenue under ERR is related to remote working. Employers may choose to pay employees an allowance towards expenses related to remote working. Up to €3.20 per day can be paid to the employee tax-free. Remote working expenses could include electricity, heat, telephone and broadband.

How can my business prepare?

The main thing businesses and payroll processors can do now to prepare, is to familiarise yourself with the Enhanced Reporting Requirements, and the rules around taxable and non-taxable expenses and benefits.

At Bright, we’re committed to assisting you every step of the way. Our team is working closely with Revenue to ensure seamless integration with their systems. You can have confidence that our various payroll solutions will facilitate easy reporting, with minimal disruption to the payroll process you're already familiar with.

To learn more about ERR, join our upcoming webinar where we’ll take you through all you need to know and answer any questions that you may have.