Revenue has updated their USC FAQs document in relation to the USC treatment in a Week 53 payroll. The previous version of the FAQs used the term "Pay Frequency" which has now been updated to "Pay Date". While Finance Act 2015 provides that additional USC COPs can be allocated in a Week 53 payroll, this only applies where an employee's normal pay day does not change during that tax year or the previous tax year. This rule is to prevent employers artificially creating a Week 53 payroll in consecutive years by changing the day on which employees are paid.
A Week 53 should not generally occur in consecutive years but there are some situations where it could legitimately happen (e.g. where an employee receives a promotion and is moved from a weekly payroll to a fortnightly payroll, or vice versa, and they have different pay days).
An employee wishes to purchase a bicycle under the Cycle to Work Scheme and his employer has agreed to deduct the cost from his gross pay under the salary sacrifice arrangement. The cost of the bicycle and related safety equipment amounts to €600. The employee has asked if he can purchase some equipment for his car to bring the total spend up to the limit of €1,000 and the retailer will issue an invoice for €1,000. Is this allowable?
No, the employer is not permitted to allow the full €1,000 as a salary sacrifice. The only items that are covered under the Cycle to Work Scheme are bicycles and related safety equipment. Where an invoice is provided to an employer which purports to be for a bicycle but is in fact for other goods or services, the employee and/or the retailer involved may be liable to a penalty of €3,000.