Keeping up to date with your employee payments is crucial for any business owner. You need to know how much you are paying staff, keep track of how many hours they are working, and get all of this information to the Inland Revenue Department (IRD) on time. Doing all of this will allow you to stay in control of your business finances each month with ease. And, what’s more, you’ll be meeting all of your government obligations to the IRD when you complete the new payday filing process each month from April 2019 onwards.
In April of 2018, the New Zealand Government introduced the Payday filing legislate to make the entire payroll process run smoother. Payday filing essentially brings all of your payroll reporting obligations together so that they are more streamlined. The process will replace Employer Monthly Schedule (IR348) for those who file online and Employer Schedule for those filing by paper. Payday Filing is here to make your life easier but first, filing process to understand everything you need to know.
Let’s take a closer look at Payday filing and what you need to know going forward.
Who Does Payday Filing Apply To?
Payday Filing was introduced in 2018 and has been optional for businesses thus far. However, as of April 2019, all employers must make the change to payday filing. In fact, all New Zealand employers paying $50,000 in PAYE and Employer Superannuation Contribution Tax (ESCT) are obligated to file electronically, either through compatible payroll software or through the Inland Revenue Department website, myIR.
Differences With The New System
As it stands in New Zealand, employers file employee earnings and PAYE data with the IRD each and every month, no matter how often they pay their employees. However, with Payday filing, this same information will be submitted to the IRD every time that you process payments to your employees. Rather than submitting a monthly schedule, you will not be requested to submit the required information after each payday. This update system allows the IRD to stay more up-to-date with what individual employee’s tax obligations are and their entitlements.
How Payday Filing Works
With payday filing, there are three different ways that you can file online. You have the option of uploading the information directly to myIR, using the on-screen facility on the same website or, most conveniently, submitting the data directly via your payroll software. Using payroll software is the easiest way to manage your new obligations as all of your payroll data such as wages, salaries, PAYE, and all additional deductions are automatically submitted to the IRD, saving you a lot of hassle and time. Be sure to remember, if you are submitting directly from your payroll software system, you will need to also submit an employer deductions form (IR345) and ensure that payment is organized.
Getting Ready For Payday Filing
For most employers, you will already have payroll software installed and in use. Simply contact your provider and see how their system supports your new Payday filing obligations. If your provider does not offer a seamless solution, consider moving to an alternative provider who can look after your needs. Your software must be compatible with payday filing by April 1st 2019. Your submissions will be due within two working days of payday or within ten days if filing by paper.
Register For Payday Filing And Be Ready
For businesses who are using payroll software, you will not need to contact the Inland Revenue Department. Instead simply make your first submission and you’ll have officially started Payday filing. If you choose to make the submissions through myIR, you will need to contact IR to register prior to making your first submission. Whatever you need to do, it’s important to start taking steps now to ensure that you are ready when April 1st 2019 comes around to ensure your payroll filing is processed without any issues.