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Local property tax (LPT)

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Summary

Local property tax (LPT) is a tax payable from owners on the market value of their residential properties in Ireland. You (the payroll operator) have a legal obligation to collect LPT from any employee who chooses to have this deducted from their salary.

Description

If any of your employees want to have their LPT deducted from the payroll, the Revenue will normally notify you in the form of a Revenue Payroll Notification (RPN).

You don't need to set up an LPT deduction in Sage Payroll. This deduction is automatically set up for you in your software and has fixed settings. If you try to edit the LPT deduction, you will see a message advising that you can’t edit this deduction (at the company level).

Resolution

Steps

To import LPT information into Sage Payroll via 'Retrieve RPNs'

  1. Open Sage Payroll and log in to the payroll as normal.
  2. Set Period for processing.
  3. Click Retrieve RPNs.
  4. Check the Employee information to be imported is correct by mousing over the blue 'i' next to each Employee's entry.
  5. Press Import to bring these changes into your payroll.

To check the Imported Details

  1. Open Sage Payroll and log in to the payroll as normal.
  2. On the menu bar, click Processing then click Employee Details.
  3. Next to the Surname box, click browse  and click the relevant employee.
  4. Click the Deductions tab.
  5. Under Local Property Tax, in the Total LPT box, check the value is correct.
  6. Repeat steps 3 to 5 for all employees who want to pay LPT through the payroll, then click Cancel.

NOTE: The next time you pay your employees on your payroll, LPT automatically deducts from the relevant employees and it appears on their payslips. 

Common questions

When should I start deducting LPT from an employee's pay?

You should start deducting LPT from an employee's pay as soon as you receive notification from the Revenue to do so.

Should I ask my employees if they want to pay their property tax through the payroll?

There's no need to ask your employees. When this payment option is chosen by an employee, the Revenue notify you directly to start deducting LPT from the employee's net salary.

Is there a date by which the full amount of property tax must be paid?

Your employees must pay the total LPT yearly amount by 31 December.

Who is responsible for refunding overpayments of LPT?

This is dependent on why a LPT refund is required:

  • If the employee is disputing the overall yearly amount of LPT to be paid, they must contact Revenue about this directly. The Revenue deal with all refunds of local property tax if an overpayment was made. You shouldn't make any refunds of LPT through the payroll (for employees applicable for LPT), unless Revenue authorise this.
  • If LPT was deducted from an employee in error (for example, if they were never subject to LPT, or LPT information was entered manually for an incorrect employee), the deducted LPT must be refunded to the employee through the payroll system.

Can I deduct LPT in a bonus run?

Yes, it is possible, however it would not typically be done - as the LPT owed for that period has already been deducted in the normal pay run.

One scenario where deducting LPT in a bonus period would be applicable is, if the employee was getting a large bonus/additional payment in the bonus run and they wanted to pay off some/all of the outstanding LPT amount. To do this:

Set a bonus run

You should only process a bonus run after you complete the normal pay run, never before it.

  1. On the menu bar, click Processing then click Set Period.

    Don't change the period number.

  2. Select the Bonus Run check box, then click OK.
Record LPT on an employee's bonus run timesheet
  1. On the menu bar, click Processing then Time and Pay.
  2. Under Entry mode, select Random then click Continue.
  3. Next to the Employee box, click browse and click the relevant employee.
  4. Under Pay periods, in the Deductions box, enter 1.
  5. Double-click the next available line in the Pay Element column, then click the relevant payment and enter it's amount in the Hrs/Val column.
  6. Repeat the previous step for each payment you want to record in the bonus run.
  7. Double-click the next available line in the Deduction column, then click LPT and enter it's amount in the E'e Value column.

    If you want to record any other deductions, double-click the next available line in the Deduction column, then click the relevant deduction and enter it's value.

  8. Click Save, then click Cancel.

Closing an bonus pay period is no different to closing a normal pay period.

I have manually entered LPT information but it's not updating correctly on the employee's ETP record or company reports. Why?

If you've manually entered LPT information for employees (including the standard amount to be deducted each period) but the LPT section on reports is not updating, even though this deduction appears correctly on the employee’s payslip. Please check the LPT deduction settings located in Company/Payroll > Deductions.

  • If when you try to edit the LPT deduction it allows the deduction settings panel to open, this is not the correct statutory LPT deduction and may be a standard deduction that was manually created by the payroll operator. Please contact Sage for help on resolving this.
  • If when you try to edit the LPT deduction you get a message that LPT cannot be edited, this deduction is the statutory LPT deduction and is setup correctly. Further investigation as to why the reports are not updating will be requred.