Are you ready for the PAYE changes which become mandatory April 1, 2019?
From 1 April 2019, it will become a mandatory requirement to file an Employment Information (EI) return online every payday, instead of filing an Employer Schedule (IR348) every month. The Employer Deduction form (IR345) will be filed separately as usual. Your filing requirements will, as a result, become more regular as follows: If you are paying your employees weekly, you will now need to submit 52 EI returns and 12 monthly Employer Deduction forms (IR345) in a year. This is a total of 64 employment relation forms that will need to be filed under the new rules, compared to 24 returns a year under the current regime.
Overview: Payday filing of PAYE information
- Employers currently report PAYE information about their employees to Inland Revenue on a monthly basis, regardless of how frequently they pay their staff
- Inland Revenue’s systems and processes are being redeveloped to take advantage of modern digital technology. Under the changes, the PAYE information filing process will be integrated into payroll software that many employers use to pay employees
- Employers using payroll software would then file their PAYE information each payday directly from payroll software
- Employers above the electronic filing threshold* would be required to file their PAYE information by the second working day after payday
- The due date for PAYE filing from other employers below the threshold* if using paper, will be within 10 working days after the payday, or the 15th and the end of month if you choose to send the IRD information twice a month.
The big question will be whether your current payroll software has the capability. This is a question all employers should be asking NOW and not at the end of March 2019.
This change will require payroll systems to be able to talk directly to IRD’s myIR site and pass the information on to the IRD. This will be easier said than done, especially if the payroll system is PC based and not in the cloud.
So, what do you need to do next?
- If you are using a PC or cloud-based payroll system you should be talking to your payroll provider now. Don’t leave it until the last minute. If you are not confident your payroll software provider will be ready, or indeed unable to cope with Payday reporting, we would recommend looking for a new solution as soon as you can, as payroll systems always take a while to bed in
- If you are using a third party to process your pay, such as a payroll bureau or accountant, you need to be asking the same questions. Is the software they use ready, and if not when will it be ready? At the end of the day, you are the employer, so you are the one who must be compliant
- If you are using a manual system, such as a wage book or spreadsheets, now is the time to ask yourself if it is time to start thinking about automating this key part of your business. The benefits of moving to a payroll system are far greater than just the Payday Reporting
- If you are not confident your payroll service provider will be ready, or if the fees will drastically increase, we would recommend looking for a new solution as soon as you can, as payroll systems always take a while to bed in. This could include bringing your payroll in-house
These changes are coming on 01/04/2019 whether we like it or not, so now is the time to start thinking about how it will impact your payroll management.
AgriSmart Payroll is well on track to be compliant with Payday Reporting by 01/04/2019, with a release date of early February 2019. We have a powerful inbuilt Payroll Wizard in place where pay runs are as simple as stepping through the Wizard process. Payday Reporting will just be another step. A simple click of a button when you run a pay. Call us today on 0800 110 172 to discuss setting up your payroll system and this will give you plenty of time to get used to online Timesheets and Payroll, in preparation for the mandatory filing each pay period.
*The threshold is $50,000 per annum of PAYE and ESCT (Employer superannuation contribution tax)