What the Introduction of Payday Filing Means for Business Owners

What the Introduction of Payday Filing Means for Business Owners

If you are a business owner in New Zealand, you would have been made aware of the government’s changes towards payday reporting this year. Payday filing is a new scheme that is being implemented and one that business owners will need to switch to before the April 2019 deadline. In just 3 month’s time, all New Zealand employers will be required to file their PAYE information within 2 days of paying their employees. In this article, we will look at exactly what Payday Filing means for business owners. If you are an employer seeking more information about Payday Filing, grab a cuppa and read on to find out more!

How Does Payday Filing Affect Me as an Employer?

If you are an employer, there are a number of things that you will need to attend to before the April 2019 deadline for Payday Filing. One of the most significant changes that will be implemented is how you report your payroll information to the IRD. Payday Filing will replace the current system of sending payroll information once a month in an employer monthly schedule. Instead, employers will be required to send this information electronically to the IRD after every payday.

With this new system in place, you needn’t file the Employee Monthly Schedule on a monthly basis.

When Is the Deadline for My Business to Switch Over?

Generally speaking, all businesses nationwide will be required to switch to Payday Filing no later than April 2019. You are required to do Payday Filing if your annual ESCT or PAYE deductions amount to above $50,000. Companies who have a combined annual value of under $50,000 for ESCT and PAYE can opt to manually file via paper returns but will have to do so no later than 10 days after paying your staff.

How Can I Setup Payday Filing?

When it comes to Payday Filing, you will want to look into upgrading your payroll software as older software may not comply with new guidelines. You can opt for a fully automated system where you will first need to establish a link between your payroll software and the IRD in a one-off authorisation process, and from then on, all your payroll information will be sent to the IRD without you needing to do anything else.

Alternatively, you can choose to use a download/upload method of filing your payrolls where you download your payroll information and then upload it into the IRD system. This method is more time consuming, and we are certain most businesses will opt for the fully automated, zero touch method mentioned above.

What Do I Need to Do Now?

It is highly advisable that businesses start looking into upgrading their payroll software as soon as possible. The sooner, the better. Considering April 2019 is not too far away, we highly recommend all businesses organise themselves well and not leave this to the last minute, just in case things don’t run as smoothly as expected. Doing this in advance will give you some margin for error, and ensure that come April, you have smoothly transitioned into Payday Filing without any problems. Businesses that fail to comply with Payday Filing are subject to a fine from the IRD, so planning well ahead is absolutely essential to avoid unnecessary costs or disruption to your business.

Employers should also ensure that they are registered with MyIR, which can be done online.

Is There Anything I Have to Worry About?

Like any big change, the switch over to Payday Filing may seem scary at first. After all, you have to upgrade software, stick to a tight deadline and learn a completely new way of handling your payroll reporting. Payday filing may even increase your need for administration efforts and compliance costs, but in the long run, you will be making your entire payroll reporting process a lot smoother, quicker and more efficient. With automated reporting, you’ll never have to worry about manually submitting payroll reports ever again.

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We hope that this article has been of assistance in giving you some information about what payday filing means for business owners.