When you operate a PAYE scheme with the Revenue Commissioners, you are required to:

• Deduct the correct amount of tax from your employees' pay (each time they are paid).
• Correctly calculate employer and employee PRSI contributions.
• Keep an accurate record of the pay and deductions made.
• Pay the Collector-General the correct amounts due each month (or quarter).

All the information needed by the Irish Payroll Accounting component to calculate PAYE for an employee is stored in the infotype Tax Data (0359). The Payroll Accounting component uses this data to make the correct tax deductions from wages and salaries.

When a new employee joins your company, you must create a Tax Data record for them. Even if you do not receive the tax details for a particular employee immediately, you can still create a Tax Data record for the employee by putting them on an emergency tax basis.

One of your required start-of-year activities is to create a new Tax Data record for each employee. Employee tax situations may also change during the course of employment. If this is the case, you will need to create new records to reflect each of these changes.