Opportunity to correct PAYE errors before penalties apply

Employers have a limited opportunity to correct 2025 PAYE errors without Revenue penalties before the relevant self-correction deadline passes.

For companies with a 31 December year end, and for self-assessed individuals operating PAYE for staff, this is a practical window to review payroll compliance, identify historic errors, and regularise matters before the position becomes more costly to manage. Once this window closes, taxpayers may need to consider making an unprompted qualifying disclosure to mitigate penalty exposure, provided Revenue has not already commenced or notified a compliance intervention.

This should be treated as a time-sensitive opportunity rather than a routine compliance point. Revenue’s current Compliance Intervention Framework places significant emphasis on proactive self-review and correction of tax errors. Businesses that act before Revenue intervention are generally in a stronger position to minimise penalty exposure and avoid escalation to more formal compliance interventions.

Why this matters: Self-correction removes the penalty exposure

Revenue allows employers to self-correct payroll errors, such as incorrect benefit-in-kind valuations, mileage or expense treatment, or PAYE Settlement Agreement omissions, without incurring a penalty, provided the correction is made within a set time limit, is accompanied by a calculation of the correct tax and interest due, and is paid in full at the time of notification.

Importantly, simply amending payroll submissions on the Revenue Online Service (ROS) is not sufficient. Revenue must be separately notified, in writing or through ROS, of the adjustment, a computation of the correct tax and statutory interest must be provided, and payment in full must accompany the submission.

Statutory interest still applies in every case.

Self-correction without penalty is not available where Revenue has already issued a Level 2 or Level 3 Compliance Intervention for the relevant period, or where the matter involves deliberate default.

When does the window close?

The deadline is not a single fixed date. It is tied to your own annual tax return filing deadline for the period in which the error arose. For PAYE, USC and PRSI liabilities, self-correction must generally be completed before the due date for filing the income tax or corporation tax return for the chargeable period in which the relevant PAYE period ends.

The ROS extension only applies where both the return and payment are made through ROS. Filing online without making payment through ROS will not secure the extension.

What happens if the deadline is missed?

Once the self-correction deadline has passed, taxpayers may still be able to regularise matters through an unprompted qualifying disclosure, provided Revenue has not already commenced or notified a Level 2 or Level 3 Compliance Intervention.

However, once Revenue issues a Level 2 Compliance Intervention notification, the opportunity to make an unprompted qualifying disclosure ceases. While a prompted qualifying disclosure may still be available during a limited period, the taxpayer’s position becomes less favourable and potential penalties increase.

What we recommend

Carry out a payroll health check now, covering for example:

• director remuneration and benefits
• employment status and contractor arrangements where relevant
• benefit-in-kind valuations
• reportable benefits processes
• mileage and expense treatment
• ERR submissions
• any remote worker arrangements
• any cross-border employment arrangements

Where an issue is identified, talk to us so that we can help prepare the supporting calculations and submission and advise on the payment required.

Where the issue falls outside the self-correction window, we can advise on whether an unprompted qualifying disclosure remains available and the most appropriate strategy for managing Revenue exposure.

Next steps

If you would like us to carry out a payroll health check ahead of this deadline, or you have already identified an issue you would like to regularise, please get in touch with a member of our Employment Tax team.

Given Revenue’s increasing use of payroll data analytics and ongoing focus on employer compliance, now is an opportune time for employers to review their payroll processes and address any historic issues before they become the subject of a Revenue intervention.