Payday filing: Is your business ready for the change?
What: If you’re a New Zealand employer paying more than $50,000 PAYE and Employer Superannuation Contribution Tax (ESCT) per year, you’ll have to file electronically through payroll software or myIR from 1 April 2019. This includes providing IRD with below information:
* Employment information (the pay details of your employees) with your normal pay cycle
* Employee details for new and departing employees. This includes your employees’ start and end date, contact details and date of birth (if they provide this to you). You should let your employee know that these details will be provided to IRD.
When: From 1 April 2019, employers will be compulsorily required to file payroll information every payday.
What if some of my employees are paid monthly, and others fortnightly?
You’ll have to file employment information for all employees within two working days of paying them. So, if you pay some employees monthly and others fortnightly, you’ll need to file within two working days of the fortnightly payday and within two working days of the monthly payday.
What does not change?
PAYE payment dates and methods of payment remain the same. This means you’ll need to continue filing an IR345 (employer deductions form) and sending through payment to Inland Revenue once a month.
What forms are changing?
The new online forms will be slightly different, because Inland Revenue will need some extra information from you, eg new employees’ contact details and date of birth.
At the moment, employers file two forms with Inland Revenue:
IR348 (an employer monthly schedule), and
IR345 (an employer deductions form).
Under payday filing, the IR348 will be replaced with a new employment information schedule, which you’ll need to fill out each payday. You’ll also need to provide employee details, which will capture information about new and departing employees.
What is the time limit for payday filing?
If you’re filing electronically, you need to file within two working days of paying your employee.
If your annual PAYE/ESCT is less than $50,000 and you’re filing on paper, you’ll have 10 working days to file.
Is this creating more work for businesses?
Not necessarily – if you’re using software, payday filing can become part of your payroll process, rather than an extra step.
It means that Inland Revenue will receive more timely and accurate information, which will then be used to give your employees more certainty about their tax obligations and entitlements.
Do I have to call to opt-in to payday filing?
No you don’t. If you want to start payday filing, you can opt in through your myIR account. You can do this under ‘I want to’ in the ‘My business’ section of myIR. If you file directly from your software, you don’t need to opt in, just send in your first employment information schedule and you’re all set.
Once you’ve opted in, the ‘Payroll returns’ account will appear under your accounts and you can start payday filing at the beginning of the next month.
If you need any help or advice, feel free to get in touch with us and we will work it out for you.