When an employment ends
When an employee retires
Where an employee retires the employer must not notify Revenue that employment has ceased if they:
- are paying them a pension
- and
- have the same registration number for current and pensioned employees.
The pension should be included on the next payroll submission, and tax and Universal Social Charge (USC) must continue to be deducted or refunded. There may be a change to the Pay Related Social Insurance (PRSI) class used.
An employee might retire on a pension that is paid:
- by their employer, but with a separate registration number
- or
- by a trust fund or life assurance company.
In this case, the employer must notify Revenue by including the cessation date on the payroll submission when the employee retires.
An employee may retire at an age when they might be entitled to claim Jobseeker's Benefit from the Department of Social Protection (DSP). If so, the employer should give their employee a letter with the information they enter on the final payroll submission. The employee can give this to their local Social Welfare Office.
The employer might choose to pay a lump sum payment to an employee who is retiring or leaving work. Lump sum payments on redundancy or retirement are eligible for special tax treatment and may be partially, or totally, exempt from Income Tax, PRSI and USC.
Next: When an employee transfers to another branch