Payroll Software becomes a must for most employers
Nick Ashford - Partner
January 30th, 2019
If you employ staff or pay contractors and deduct Withholding Tax, then your life is quite likely going to become more difficult after, 1 April 2019.
From, 1 April 2019 all employers and those who deduct withholding tax from contractors will need to comply with the new Payday filing rules.
What is Payday Filing?
Payday filing replaces the monthly employee pay details (IR348) that were due after the months end.
NOTE: It does not replace when and how you pay the IRD, you will still pay the IRD on the same dates you are currently paying them.
What will you have to do?
New and departing employee details need to be provided to the IRD on or before their first payday.
Within 2-working days of paying your employees, you will need to disclose the pay details of each employee to the IRD. This will include gross wages, PAYE, kiwisaver, and student loans etc.
If you deduct withholding tax from contractors i.e. scheduler payments, then you can disclose this information either 2-working days after paying the contractor, or twice monthly, 2-working days after 15th for all contractor payments made between 1st – 15th, and 2-working days after the end of each month for all contractor payments made between 16th – end of each month.
How do you file the information to IRD?
If your PAYE/ESCT payments are less than $50,000 per annum then you can use a manual payday filing form, which will be available from the IRD after, 1 April 2019.
However, most employers will have three options;
1. Filing through payroll software provider. IRD expect that this will be the most popular option, and it is a big win for payroll software providers. Most software providers have not yet released their payday filing functions. We do have the time-frames from most of the large providers with training and instructions on how to use their payday filing function. This will be available in February.
It is expected that fully compatible software providers will be able to directly file the required information to the IRD seamlessly . . . Note “expected”.
If you are not using any payroll software, or, you are unsure if your payroll software will comply with payday filing then please contact one of your Withers Tsang partners or senior accountants.
2. Upload of Payday filing file from non-integrated software. There is a chance that you may be using payroll software not directly linked with the IRD. This is likely if you are running a desktop product rather than a cloud product.
If this is the case then you will need to understand both how to access and save the necessary payday filing file, and, how to upload that file to the IRD.
3. Manual entering of payroll information through myIR. If you are not using any payroll software then you can access and enter your payday filing through the myIR portal on the IRD website.
Need more information?
Contact your Withers Tsang partners or senior accountants to discuss what options best suite you.