Who is responsible for collecting PAYE tax?

Employers are responsible for collecting PAYE (Pay As You Earn) tax on behalf of their employees. This system is designed to simplify the process of tax collection and ensure that taxes are paid regularly and on time. When employees earn wages, employers automatically deduct a certain amount for tax before paying out their salaries. This deduction is then forwarded to the Revenue Commissioners, which is the body responsible for tax collection in Ireland.

Employers not only withhold income tax through PAYE but also contribute to social insurance and other deductions, making them key players in the taxation process. This system alleviates the burden on employees to manage tax payments themselves, as the deductions are seamlessly integrated into their payroll.

The other options represent various groups or entities that do not perform this function. Local governments typically manage property taxes and other local revenue streams, financial institutions are mainly concerned with managing and investing money rather than tax collection, and taxpayer associations may provide support or advocacy for taxpayers but do not have any role in collecting taxes directly.