Enhanced Reporting Requirements: What employers need to know, do, and act on now
Revenue has adopted a more formal approach to enforcement of the reporting required under new Enhanced Reporting Requirement (ERR) legislation. Employers are now receiving Level 1 compliance intervention letters where ERR filings are missing, late or incomplete, and Revenue is using data analytics to cross-check submissions against payroll, VAT and corporation tax records. If you haven't reviewed your ERR position recently, now is the time.
WHAT you need to know
ERR is not new but the Revenue's enforcement of it is!
Enhanced Reporting Requirements (ERR) have applied to all employers since 1 January 2024. Employers must report certain non-taxable payments to employees and directors to Revenue in real time, on or before the payment date, via the Revenue Online Service (ROS). The three reportable categories are:
- Travel and subsistence payments (across several sub-categories)
- Small Benefit Exemption items (e.g. vouchers, up to €1,500 a year across a maximum of five benefits)
- The remote working daily allowance (up to €3.20 per day)
Enforcement has changed since early 2026
Since the start of 2026, Revenue has formally escalated ERR enforcement, making it a core part of standard PAYE risk assessments. Revenue is applying enhanced analytics across all reportable categories to identify anomalies, gaps and inconsistencies at both employer and individual employee level, and this activity is broad-based across sectors.
As a result, Revenue has begun issuing Level 1 intervention notifications - a formal step under Revenue's Code of Practice for Compliance Interventions - specifically targeting ERR non-compliance.
What's triggering Revenue's attention
| Risk area | Why it gets flagged |
| Non-filing, late or incomplete ERR submissions | The most direct trigger — Revenue's analytics readily identify payments made with no matching ERR return |
| Round-sum or fixed monthly travel/subsistence allowances | These are fully taxable and should run through payroll as pay — not be reported as tax-free under ERR |
| Small Benefit Exemption breaches | Exceeding the €1,500 annual limit or the five-benefit threshold, or no centralised tracking across departments/payroll |
| Incorrect categorisation | Misallocating payments across travel and subsistence sub-categories is a common data-quality flag |
A Level 1 intervention is a formal compliance step and should be treated as time-sensitive.
A Level 1 intervention is a formal compliance step and should be treated as time-sensitive. Revenue expects employers to fully regularise their ERR position. Not simply acknowledge the letter or start filing correctly going forward. Historic gaps need to be addressed too.
If a Level 1 notification is not resolved within Revenue's specified timeframe, the matter can escalate to a Level 2 intervention - a materially more serious risk exposure involving:
- A broader PAYE and employment tax review, extending well beyond ERR
- Higher penalties and interest
- Detailed examination of expense policies, payroll processes and governance
- Increased likelihood of ongoing Revenue scrutiny
Where non-compliance is identified before Revenue makes contact, a voluntary/qualifying disclosure or self-correction can significantly reduce penalty exposure and avoid publication on the list of tax defaulters. This option disappears once Revenue has already opened an intervention.
What are the necessary steps, action items and timing
Now
Confirm whether ERR filings are complete and accurate from 1 January 2024 to date.
Now
Check submissions meet Revenue's data, schema and ROS validation requirements.
Within 2-4 weeks
Review travel/subsistence and Small Benefit Exemption practices against the risk areas above.
Before Revenue makes contact
Identify and remediate any historic gaps. Consider a voluntary disclosure if needed.
Ongoing
Put a robust, ongoing process in place for real-time ERR compliance
Immediately
If you've already received a Level 1 letter, respond within Revenue's stated deadline - don't just acknowledge it
Frequently Asked Questions
We've been filing ERR returns since 2024. Are we safe?
Not necessarily. Revenue's analytics are now checking accuracy and categorisation, not just whether a return was filed. Round-sum allowances, mis-categorised travel and subsistence claims, and Small Benefit Exemption breaches can all trigger a Level 1 letter even where filings have been made.
We haven't started ERR reporting yet. what happens now?
You should not wait for Revenue to contact you. Some employers have been told they can begin reporting prospectively rather than backfiling from 2024, but this has not been formally documented by Revenue and should be treated cautiously. Historic non-compliance should still be reviewed, particularly for the Small Benefit Exemption, which needs an assessment of past claims back to 1 January 2024.
We received a Level 1 letter. What should we do first?
Treat it as time-sensitive. Revenue expects a full regularisation of your ERR position, not an acknowledgement. Start by confirming what has and hasn't been filed correctly since 2024, then respond within Revenue's stated timeframe.
Does ERR apply to directors as well as employees?
Yes. Travel and subsistence payments to directors are reportable under ERR even where the director is not otherwise in receipt of pay.
What's the difference between a Level 1 and a Level 2 intervention?
A Level 1 intervention is a formal but earlier-stage compliance step, generally focused on a specific issue such as ERR. A Level 2 intervention is a materially more serious risk review or audit, with a broader PAYE scope, higher penalties and interest, and closer examination of payroll processes and governance.
Can we fix historic errors ourselves before Revenue gets in touch?
Yes, and this is generally the best course of action. A self-correction or qualifying voluntary disclosure made before Revenue opens an intervention can significantly reduce penalty exposure and avoid publication on the list of tax defaulters. Once a Level 1 letter has issued, this option is no longer available in the same way.
Our payroll provider handles ERR for us. Are we covered?
Not automatically. Responsibility for accuracy sits with the employer. It's worth confirming what your provider is actually reporting, how travel and subsistence payments are being categorised, and whether Small Benefit Exemption tracking is centralised across your organisation.
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