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Budget 2027 brings welcome simplification for employer reporting
The principal employment tax measure announced in Budget 2027 is a significant easing of the Enhanced Reporting Requirements (ERR) regime.
From 1 January 2027, employers will be able to choose whether to continue reporting qualifying travel and subsistence expenses, remote working allowances and small benefits on a real-time basis or move to a monthly reporting cycle. This represents a welcome departure from the current requirement to submit ERR returns on or before the date a payment is made to an employee.
Since its introduction in 2024, the ERR regime has increased the compliance burden on employers, requiring payroll, finance and HR teams to capture and report certain tax-free payments in real time. While Revenue has consistently stated that the objective of ERR is to improve visibility over these payments, many employers, particularly SMEs, have found the reporting obligations disproportionate to the tax risk involved.
The move to monthly reporting will provide employers with greater flexibility in how they meet their compliance obligations, while continuing to provide Revenue with access to the same information. Businesses that have invested in processes and systems to facilitate real-time reporting may choose to maintain their existing approach, whereas others may welcome the opportunity to align ERR submissions with their broader monthly payroll and compliance processes.
RSM's view
This is a practical and sensible measure that recognises the operational challenges many employers have experienced under the current ERR regime. Revenue retains visibility over tax-free payments and benefits, while employers gain greater flexibility in how they comply. The change strikes a better balance between effective tax administration and the practical realities of running a business, and will be particularly welcomed by SMEs and employers with limited payroll resources.
Get in touch with our Global Employment Services team if you would like to discuss how the changes may affect your payroll and employment tax compliance obligations.
