Waitomo News Article September 2018 - Introduction of Pay Day Filing for Employers
Over the past month all farmers and other businesses in New Zealand that employ staff would have received information from the Inland Revenue Department about the introduction of pay day filing.
From the 1st April 2019, instead of filing an employer monthly schedule (IR348) once every month, employers will now be required to provide (file) employees’ earnings information every pay day to the Inland Revenue Department.
The Inland Revenue Department are introducing pay day filing to reduce the long delay for some of the earnings information that it receives about wage and salary earners. Currently where an employer files PAYE information on the 20th of the month, some of this payroll information can be over forty days old as it relates to the previous month. The Inland Revenue use peoples’ earnings to calculate Child Support, Working for Families and other entitlements. Pay day filing will mean that the Inland Revenue Department are kept up to date with what people are earning on a weekly basis and therefore Child Support and other information will be calculated in a much more timely and accurate manner.
If an employer’s annual PAYE and ESCT (employer superannuation contribution tax) are greater than $50,000 a year, then the employer will need to file their weekly pay day and monthly information electronically, through MyIR, or by using compatible software. Those employers that have annual PAYE deductions of less than $50,000 still have the option of paper filing. In addition, all employers will now be required to provide new and departing employees address information, as well as their date of birth to the IRD.
Most large businesses already use a software provider (payroll program) to assist with their wage and PAYE requirements. Certainly, since the advent of KiwiSaver, which has increased the complexity of managing payroll, there has been a large increase in the number of farmers and businesses that are using payroll software or a tax agent. Software providers are now getting geared up so that they will be able to file pay day information at a touch of a button and for this reason it is likely that going forward, most businesses will be better off using a software package to assist with their wage and PAYE processing.
One thing that hasn’t changed is that businesses will continue to file employer deductions and pay the PAYE and other deductions over to the Inland Revenue Department on the 20th of the following month.
Payroll can be a very time consuming and tricky aspect of business administration, and many accountants and bookkeeping organisations are well placed to assist employers with the changes that are going on. Talk to your accountant or payroll provider to ensure that you will be ready come the first of April.