Employers paying employees' 2020 tax liability

Revenue will facilitate employers who wish to pay some, or all, of the employees' 2020 tax liabilities. This applies to Income Tax and Universal Social Charge (USC) liabilities which arise due to the TWSS.

Employers must engage directly with employees and agree the value and method to pay the liability involved.

In January 2021, Revenue made a Preliminary End of Year Statement for 2020 available for each employee. This will assist in determining the amount of Income Tax and USC due.

All employees, including those who benefited from the TWSS, can view their Preliminary End of Year Statement in MyAccount. Each employee will be able to see if there is an underpayment of Income Tax or USC arising due to the TWSS.

How to pay your employees' tax liabilities

To pay employees' tax liabilities you can:

  • provide funds to each employee to meet their Income Tax and USC liabilities, as shown in their Preliminary End of Year Statement. Each employee must then pay their liability via myAccount.
  • or
  • amend your last payroll submission of 2020. You must add additional 'Income Tax paid' and 'USC paid' values that equal the amount of tax liability you are paying on behalf of the employee from the Preliminary End of Year Statement. This must be done for each employee concerned. Some payroll packages do not provide this facility and it may be necessary to enter the information manually through Revenue Online Service (ROS).

You need to pay the additional amounts that are notified via a revised monthly Statement issued by Revenue.

The employee's Preliminary End of Year Statement will be recalculated subsequently. This will show the additional Income Tax and USC liabilities paid directly by you.

For both options above, each employee must complete their 2020 Income Tax Return.


Initially this facility was limited to payments made by employers on behalf of their employees up to end June 2021. The concession is extended to run until the end of September 2021. This will ensure employers have the fullest information available following the TWSS Reconciliation process.

On a case by case basis, a short extension beyond the end the September 2021 deadline may be available. This will be limited to employers who wish to settle its employees’ TWSS related debts but is unable to do so within the timeframe due to exceptional circumstances. In such cases, an employer should contact their Revenue office to discuss the matter.

Documentation and records

You must retain copies of any documentation and records covering your:

  • engagement with your employees about these arrangements
  • agreement to undertake these payment arrangements.


Revenue will not apply Benefit-in-kind rules to these payments you make on behalf of your employees.

Further clarifications

The BIK concession also applies where an employer pays the TWSS related tax and USC liabilities of an employee who is:

  • a self-assessed taxpayer
  • is joint assessed, and his or her spouse is self-assessed.

The BIK concession also apples where an employer pays the TWSS related tax and USC liabilities of a proprietary director(s) in the company. This is provided that the employer pays the TWSS related liabilities of all employees in the company.

Revenue previously advised that certain employees may not have received their full entitlement under the TWSS and are due additional payments. These payments are known as Direct Temporary Wage Subsidy (DTWS) refunds. For more information please see relevant Revenue confirm 'operational phase of TWSS now in place' Press Release.

Any employee who is due to receive a DTWS refund will have that amount offset against their TWSS liabilities The resulting balance, on their Statement of Liability, is the net amount due to Revenue. This is the amount that a person’s employer may wish to pay on their employee’s behalf to Revenue.  

Revenue expects that the calculation of DTWS amounts due will be finalised at the end of June 2021.

It is not possible for Revenue to provide the actual amount of Income Tax and USC arising from TWSS payments payable by each employee for 2020. The amount payable is unique to each employee. It is essential that employers engage with their employees to agree the amount of the TWSS liabilities that an employer is going to pay. The employee’s Statement of Liability will assist in determining the liabilities relating to the TWSS payments received. 

If the payment made by the employer does not settle the employee’s TWSS debts the balance payable will be collected over 4 years starting in January 2022 if:

  • the employee is subject to tax through the PAYE system
  • is not subject to self-assessment.


Employers paying amounts to settle these employee IT liabilities will not receive a deduction under the Taxes Consolidation Act, 1997, Section 81(2)(a).

These payments would not be regarded as wholly and exclusively incurred for the purposes of the employer’s trade or profession. Furthermore, Section 81(2)(p) specifically denies a deduction in respect of any taxes on income.