Late Spring and early Summer has seen plenty of rain across the country. Good grass growth has kept farmers and contractors busy, and with Christmas just around the corner, there is a lot to think about both on and off the farm.
Pay Day Filing
Our office has been receiving calls from clients on a daily basis regarding the introduction of Pay Day Filing, which is compulsory for every employer from the 1st April 2019. The introduction of Pay Day Filing is one of the biggest shake ups facing employers in recent times. In a nut shell, the main changes are as follows:
- That instead of filing an employer monthly schedule (IR348) every month, employers will file employment information every pay day, in line with the businesses payroll cycle.
- Employers will have two main ways to file their payroll information with the Inland Revenue Department. This is through either filing electronically through Inland Revenue’s MyIR online services, or employers can file by filling out paper returns and sending this information in to Inland Revenue.
- If you file electronically, then payroll information needs to be filed with IRD within 48 hours of paying an employee. If you file by paper, Inland Revenue needs to receive your information within ten working days after pay day.
- Paper filing is only available if PAYE deductions are under $50,000 per annum, over that amount employers must file electronically.
- Employees deductions such as PAYE, KiwiSaver, Student Loan, Child Support etc will continue to be paid to the Inland Revenue Department on the 20th of the following month (although some large employers will continue to have to pay twice a month, like they currently do).
Making Payroll Easier
Employers should consider whether they would be better off using a payroll software system to help with the administration and making the book work easier. There is a wide variety of products on the market to choose from. Most of these are web based and therefore do not require downloading onto your computer. One of the benefits of using a payroll software package is the way that annual leave, holiday pay and sick day entitlements and calculations can be done at the press of a button. Currently this sort of thing, for employers using a manual system, is prone to error and can be very difficult to calculate correctly. Record keeping involves a lot less paper, with employee and payroll information uploaded into the ‘cloud’.
Another option for employers is to use a payroll intermediary. By using an intermediary, they take care of the IRD filing requirements and administers the payment of PAYE and other deductions to Inland Revenue. When using an intermediary, once employee information (remuneration package, tax code etc) is set up, the actual administration and payment of wages is reasonably straight forward. Most employees on farms are paid on a salary basis, so it is simply a matter of entering in any sick days or days off. Some payroll systems use an app which can be downloaded for employees who are paid on an hourly basis to enter their hours. The employer can then authorise these or they log in and enter the hours themselves. With days off and sick days entered each week, annual leave calculations can be done at any time at the press of a button. Pay slips are generated and can be automatically emailed to the employee. Customer service from the intermediaries that we have dealt with has been on the whole very good, with most intermediaries using a New Zealand based help line to assist with any queries or issues.
Some farmers and business people will prefer to continue dealing with their accountant for their payroll administration. Your accountant understands your business and is able to give payroll advice and a more personal service. Bailey Ingham, like many other firms, have been gearing up over the last few months to assist farmers to deal with the changes that are taking place.
Dairy Farm Values
A talking point that comes to mind as I write this article, is the discussion around the difficulty in selling farms in some areas, particularly in the dairy sector. It appears that the uncertainty facing the agricultural sector in regards to the drop in the dairy payout, environmental issues, Mycoplasma Bovis disease, along with compliance and health and safety issues are having a definite effect on farm prices. Some farmers that were thinking of selling are now deciding to hold off for the time being. Some are considering other farming options such as the option of 16-hour milkings, which can take away a lot of stress for both livestock and farmers alike. There is certainly plenty to think about and there are options to make life on the farm easier. The importance of having a good team around you to discuss options and alternatives is just as crucial as ever.
I would like to take this opportunity to wish all farmers and business people a happy, safe and stress-free Christmas and New Year.