How Payday Filing Will Impact Your Business

 When it comes to running a business, you want to make sure you are compliant with all the regulations.

That is why, an important part of running a business in New Zealand is reporting your employee payment info to the Inland Revenue Department (IRD). Not only your own tax records are dependent on it, but also those of your employees.

As you may know, the rules about how and when you should communicate this info to the IRD have recently changed.

Previously, businesses were only asked to file this information once a month. But as of April 1st 2019, you must file payroll info within two days of paying your employees. This time frame applies whether you pay them weekly, fortnightly or monthly.

While the changes may sound like a lot of extra work and that you might have to adjust your systems slightly to accommodate them, the process is actually quite straightforward.

Read on to find everything you need to know about payday filing...

How Payday Filing Will Impact Your Business

How Are The Forms Changing?

Previously, your business would have filed an Employer Monthly Schedule (IR348) form once a month. This will be replaced with a new employment information schedule, which should be filled out every payday.

The old Employer Deductions Form (IR345) is no longer needed.

If you haven't already been filing electronically (using payday compatible software or the myIR service), you will have to start doing so (unless your annual PAYE/ESCT is under $50,000).

 

What Else Is Changing?

As well as the new forms to fill, you will also need to give more information to Inland Revenue about your employees. They require the address of any new hires you make, along with details of staff that are moving on. Date of birth is also requested if you have that information. This information should also be filed after every payday, not once a month.

 

How Do I Submit The Reports?

The most effective and efficient way to submit your reports is to upload them directly to the IRD using compatible accounting software such as Xero. You can set this software up to automatically create a report every time you process your pay runs.

If your business doesn't use software that is compatible with the IRD system, you can still use the old myIR system to upload or fill out forms online.

Paper forms are being phased out by the IRD. Currently, you can only submit paper forms if your business pays less than $50,000 a year in PAYE and ESCT (Employer Superannuation Contribution Tax).

To make the transition as easy as possible and to reduce the chance of error, we do recommend upgrading your systems and moving across to online payroll software (or work with an accountant who does!). Automating or outsourcing your payroll is one of the most effective ways to save time and ensure you are fulfilling the requirements of the IRD.

 

What If I Have Multiple Payment Schedules?

A lot of people have asked about what they should do if they have multiple payment schedules to submit. The easy answer is, no matter what payment schedule your business uses, each time you pay an employee, your information has to be filed within two working days.

So, if you pay some staff fortnightly and others monthly, you will have to file twice to ensure you make those deadlines.

 

When Should I Pay PAYE To Inland Revenue?

The big question on everyone's lips is when does the money have to leave your account!

The great news is that the method of making these payments has not changed. PAYE and other deductions should be paid either twice a month or monthly, depending on your total annual PAYE deductions. You can find more info on your payment requirements here.

 

Do you want to streamline the way that you handle Payday filing in your business? Maybe you are looking for an accountant that can make your finances easier? Then get in touch with us here at Strive Accounting. Drop us a line today.