Next year the IRD will begin a new initiative called payday filing. Instead of filing employment information once a month (regardless of when a payday falls), employers will need to file employment information online within two days of every payday. This doesn’t affect tax payments at all, just the reporting around earnings and PAYE.
The new system will keep the IRD up to speed with PAYE information, meaning any mistakes or inaccuracies with tax and entitlements are picked up quickly. This protects not only employees but also employers, who can quickly correct any PAYE mistakes as soon as they’ve been made.
Electronic payday filing is compulsory for any employer paying over $50,0000 per annum in PAYE and ESCT. If you’re an employer who is paying less than this threshold, you can continue to file paper returns. If you wish to change to payday filing, you’ll have to wait until the system is in full effect.
Payday filing is similar to schemes successfully used in Australia and the United Kingdom, and will be compulsory in New Zealand as of April 1st 2019. Businesses are welcome to begin payday reporting any time before then (except for those who currently file paper returns, as above). This may help prepare you for when the scheme goes into full effect.
Payday filing is part of the Making Tax Simpler scheme, but it does mean more paper work for employers and may take a bit of getting used to.
Of course, if The Detail is already looking after your payroll, you don’t have to think about any of this. Our online FlexiTime system is designed for businesses with permanent, part-time, casual, and contract staff, and is already set up for an easy transition to the new scheme. We’ll continue to eliminate any payroll problems, reduce administration, and improve the accuracy and speed of paying your staff, all within a cloud-based IRD-compliant payroll solution. You really can just set and forget your payroll.
For more details about payroll filing and what it means for you, check out the IRD’s website.
If you’re feeling overwhelmed by all the details, call us and find out how we can help you.