From April 2019 onwards, all New Zealand businesses will be required to file their PAYE returns every payday, as opposed to once a month.
Some 400 employers are already using payday filing. However, there are many thousands more who need to make the switch. With less than seven months to go, time is running out and the Inland Revenue has advised businesses to begin the transition now.
The payroll software provider FlexiTime assisted Inland Revenue with trialling payday filing. Its chief marketing officer, Jake Harvey, said: “We’re excited to already be up and running with our zero-touch, fully-automated payday filing solution that eliminates what was previously a manual monthly task for businesses.”
Currently, employers submit the employer monthly schedule (IR348) through myIR or by post. The introduction of payday filing – using myIR or other compatible software – reduces the number of steps associated with processing payroll, thereby also reducing the chance of errors, and minimising the likelihood that businesses will incur penalties.
“The outcome is a system that will be a vast improvement on how businesses interact with government — making it easier than ever to file payroll paperwork,” Harvey said.
“The more timely information will allow the Inland Revenue to provide certainty around an employee’s social entitlements such as Working for Families Tax Credits,” explained Richard Owen, Inland Revenue customer segment lead.
From 1 April 2019, employers will be required to:
- File employment information every payday;
- Provide the address and date of birth for new and departing employees (if they have provided it to you);
- File electronically if your annual PAYE/ESCT is $50,000 or more.
Employers who deduct $50,000 or less in PAYE and Employer Superannuation Contribution Tax will be able to file on paper, though only from April 2019. All other employers will need to file electronically.
Transitioning to payday filing
Harvey advises businesses to check that their provider will be offering payday filing, as many older desktop-based systems won’t be compatible. “Based on our experience to date, it will take each payroll software provider some time to get payday filing up and running smoothly,” Harvey said.
The Inland Revenue has identified three simple steps to begin the transition. They include:
- Check the payroll processes to plan the appropriate time to commence payday filing.
- Search for payday filing compatible software. (Most of the existing software providers are amending their systems to serve this massive change.)
- Those businesses which are currently using myIR have to announce their intention to switch to payday filing via their myIR account.
Getting to grips with a new system may feel like a daunting process, but for anyone using payday filing compatible software, the process will be far more convenient. In addition to reducing the payroll processing steps for employers, the new system will save small enterprises various costs, from paying payroll fees to outsourcing intermediaries.
The new system also provides added security, as employers with compatible software can submit their information directly to Inland Revenue instead of a separate file upload in myIR.