Running a payroll reconciliation in Ireland
Reviewed by Mellow Editorial Team, HR & payroll content team
A payroll reconciliation in Ireland is the process of confirming that what you reported to Revenue through real-time payroll submissions exactly matches what you actually paid employees and deducted in tax — and then correcting any differences before they become a compliance problem.
What reconciliation actually means in an Irish context
Ireland's real-time payroll reporting system means you submit a Payroll Submission Request (PSR) to Revenue on or before every payday. Unlike older annual-reconciliation models, errors show up quickly in Revenue's records. A reconciliation is your internal check that those submissions, your payroll software figures, your bank payments and your Revenue account all tell the same story.
You are reconciling three things simultaneously: the gross pay you owe employees, the deductions you withheld on their behalf (PAYE, USC, employee PRSI), and the employer contributions you owe directly (employer PRSI). Each of these flows to a different place, and each needs to balance.
Step one: pull your payroll reports for the period
Start with a payroll summary report for the period you are reconciling — typically a tax month, though some employers reconcile weekly or quarterly as well. This report should show, for every employee:
- Gross pay
- PAYE deducted (at 20% or 40% depending on where each employee sits relative to their rate band)
- USC deducted across the applicable bands (0.5%, 2%, 3% or 8%)
- Employee PRSI deducted (Class A: approximately 4.1% of reckonable earnings)
- Employer PRSI (Class A: approximately 11.15% of reckonable earnings)
- Net pay issued
Total each column across all employees. These totals are your payroll-side figures.
Step two: check against your ROS submissions
Log into ROS and pull the employer record for the same period. Revenue records every PSR you submitted, and the Employer Summary shows the cumulative figures Revenue has on file for your PAYE, USC and PRSI obligations.
Compare your payroll totals line by line against the Revenue figures. Common discrepancies include:
- A submission that failed silently and was never re-sent
- An amendment processed in your software that was not re-submitted to Revenue
- A new employee added mid-period where the payroll ran before the employee's tax credit certificate (TCC) was received, causing emergency tax to be applied temporarily
- Benefit-in-kind values that were updated in the software but the corrected PSR was not filed
Any difference between what your software shows and what Revenue has recorded needs a reason. If the submission is missing, file it. If a figure is wrong, submit an amended PSR for the relevant pay period.
Step three: reconcile to your bank
Run a report of net pay payments from your bank account for the same period. The total should match the sum of net pay figures in your payroll summary. If it does not, check for:
- Manual payments made outside the payroll run
- Overpayments recovered from an employee (which may need to be reflected in a corrected payroll submission)
- An employee paid twice in error
- Outstanding payments to leavers
Your bank reconciliation catches errors that the Revenue comparison will not, because Revenue sees gross figures and deductions — not the net that leaves your account.
Step four: reconcile your P30 liability to what you paid Revenue
Each month you are required to pay Revenue the combined amount of PAYE, USC, employee PRSI and employer PRSI you collected. This is your monthly P30 liability, paid through ROS by the 23rd of the following month (or 14th for non-electronic).
Check that the amount you paid Revenue matches the liability shown in your payroll software and in the Employer Summary on ROS. If you underpaid — even slightly — Revenue will flag the difference and interest may accrue. If you overpaid, you can offset the credit against the next period or apply for a refund.
Step five: deal with year-end and P35 considerations
At the end of each tax year, Revenue expects your cumulative annual submissions to reconcile fully. Since the move to real-time reporting, the formal P35 annual return has been replaced by the data Revenue accumulates from your PSRs throughout the year. However, employers still need to do a year-end review to confirm:
- Every employee's annual gross pay, tax, USC and PRSI figures are correct
- Any benefits-in-kind, notional pay or non-cash elements are captured correctly
- Leavers and new starters during the year have complete records with no gaps
If discrepancies remain after the tax year closes, you correct them by submitting amended PSRs for the relevant periods. The sooner you do this, the lower the risk of Revenue raising an enquiry or a compliance intervention.
Common reconciliation errors worth watching for
Emergency tax is a frequent source of reconciliation problems. When Revenue has not yet issued a TCC, employees are taxed at the higher rate with no credits applied. Once the correct certificate arrives and the payroll is corrected, the amended submission must be filed promptly — otherwise Revenue's records will remain wrong.
Irregular payments such as bonuses, commission or expense reimbursements (where some elements are taxable and others are not) also cause mismatches if the payroll software has not been set up correctly to classify them. Review these lines carefully during any reconciliation, particularly where how Mellow runs payroll across six countries might highlight classification differences across jurisdictions.
Pension deductions — especially as My Future Fund auto-enrolment rolls out from 2026 — will add a new contribution line to reconcile for both employees and employers. Build that into your reconciliation template before the obligation applies to your workforce.
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