PAYDAY FILING

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)

Orchard # 88 XXXL

STAFF COMPLIANCE SOFTWARE FOR HORTICULTURE

Our Horticulture module has been designed to address the idiosyncrasies of time recording and general records compliance. These are in many ways peculiar to the Horticulture Industry. Our main areas of focus are outlined in the following sections:

Staff Interface
  • Time and units can be entered by individual staff or by a supervisor via smartphone, tablet, or PC
  • Time is automatically measured against minimum wage each pay period
  • Paid breaks are measured and displayed in the Payslip
  • All units displayed on the payslips have a unit value
  • Capability to have multi units/rates and hourly rates measured in a single pay period
  • Staff can easily apply for leave
  • Staff and easily view their payslips
Units of Measure (Piece Rate)

There are two ways units can be measured from a piece rate perspective: Independently or collectively:

Independent:

The team can harvest, pick, or prune units (bins, boxes, plants) independently. If so, units are applied to each team member individually and the minimum wage, paid breaks, deductions, and payments are all factored in

Collective:

The team can harvest, pick, or prune units (bins, boxes, plants) collectively. If so, units are applied to the entire team and they will be paid according to the hours they work as a % of the total units. This factors in the minimum wage, paid breaks, deductions, and payments

Further Measures
  • Hourly rates of pay can be easily mixed with piece rate payments for any given pay period
  • Paid breaks are factored in to piece rates
  • Daily deductions for travel, drinks, and so on can be entered daily by the supervisor(s)
  • Minimum wage top-ups are automatically measured and displayed in corresponding reports and payslips
Day-to-Day Features
  • Live timesheet entries are displayed for all team members
  • Timesheet entries link to corresponding reports
  • Daily tallies for teams are easily checked, edited, and confirmed prior to Push to Customer Jobs and/or Payroll
  • Leave requests are displayed
  • Built-in reminder function
  • All types of Leave are displayed on the Dashboard
Job Costing
  • Time and Units flow through to the Job
  • Ability to add Overheads
  • Easily identify Gross Job Profit per Job
  • Ability to add notes, documents, and procedures
Team Builder & Job Allocation
  • Create teams on a daily basis with a smart visual table
  • Edit and manage teams as necessary
  • Allocate Jobs to supervisors so they can select the applicable Job
Payroll
  • Seamless integration between Timesheets, Leave, and Payroll
  • Payroll Wizard makes the pay run process quick and easy
  • There is a full suite of reports
  • Automatically calculates any minimum wage top-ups and includes it in Payments
  • Accounts for statutory minimum paid breaks
  • Extra Payments are catered for with ease
  • In-built Final Leave Calculator
  • IR Filing & Pay Day Filing
  • Easily upload payments for the team
Health & Safety
  • Dashboard displaying KPI’s
  • Easily add in risks with their associated location, notes, and actions
  • Incidents are recorded quickly – ability to upload photos and/or videos
  • Communications to smartphones for action
  • Customise your templates to suit your farm
  • Full Induction process
  • Easily list employee skills
  • Document storage
Other
  • Have multiple farm units on a single licence
  • Contract Builder to minimise touch points when hiring labour
  • Allow others to access your AgriSmart licence if desired – offering full transparency
  • All staff records (time, leave, contracts, meeting notes, audits and other documentation) can be held in the one place and are accessible anywhere you have an internet connection
Contact us via info@agrismart.co.nz or on 0800 110 172 to learn more

NEW TECHNOLOGY FOR HORTICULTURE

TimeSmart software has been around in one form or another for over 10 years, with Time and Attendance and Full Job Costing being our cornerstone features.

In 2015, AgriSmart was tailored to address certain pain points around staff management in the NZ Dairy Industry. This was to specifically deal with Time and Attendance, Minimum Wage requirements, Leave measurements based on specific roster requirements (peculiar to the Dairy Industry), Payroll, and Health & Safety. As a result, AgriSmart maintains a leading market presence in the NZ Dairy Industry.

For some time, AgriSmart has been developing a fully specific Horticulture module which is nearing completion.

The AgriSmart Horticulture module will be a Full Staff Management application built for NZ Horticulture. Our development focus is reliant on considerable inputs from a handful of NZ horticulture businesses.

AgriSmart offers a solution to replace manual Time and Attendance and all the manual measures thereafter, by offering an automated Data Chain as below:

Manual Data Chain vs Automated Data Chain

Manual Date Chain: The old world of manual paper-based time entry necessitates time data be touched several times throughout its life-cycle. It may be added to Jobs to be billed, paid breaks, and the measurement of minimum wage. Thus, formulas need to be manually applied at multiple points, which is time-consuming in itself.

Manual timesheets individually represent time and production figures – units picked, cut, pruned, plucked, thinned, and harvested. The relative cost of that production are numbers manually derived from those initial timesheets.

Automated Data Chain: With AgriSmart, all production numbers are collated from the time entered. From here, this data flows through to the hourly rates of pay for piece rates, wages, or both, for all employees, for any length of time. This is all automated from the initial online time and production data from the field – simple!

Old System Process vs AgriSmart Process

OLD SYSTEM PROCESSAGRISMART PROCESS
Paper entries for time and units from the fieldTime, units, and job are entered into the device and units are apportioned independently or collectively
Paper gets to the office somehowThe office checks the accuracy online
The paper data is entered into multiple spreadsheets to work out rates, pay paid breaks, minimum wage, deductions, and paymentsAll measures are automated with time and units to Jobs (where applicable)
Time and units are entered against the Job if billing forwardThe data is assimilated into various reports
Summaries are either exported or manually entered into PayrollThe Payroll module processes the pay in 5 steps
Payslips are printed Payslips are viewed in AgriSmart

AgriSmart Time and Attendance Flow

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Our Horticulture module also offers the following:

  • Crop Costing
  • Fully integrated Payroll
  • A Health & Safety module
  • Storage of staff documents
  • Employee skill sets and training

If you are looking for a solution that will reduce human error, deal with time only once, and ensure you have a clear management overview that works for your business (be it large or small), then contact us to discuss this. We look forward to hearing from you.

Leave it at your own peril

From time to time businesses of varying sizes and across different industries are made examples of by the media in relation to inaccuracies found in methodology used to calculate various staff leave types. Accuracy, and to some degree awareness, of leave types, how they are measured and ultimately how they are applied, can, in reality, be a proverbial “minefield” driven by complex legislation and a multitude of differing views and interpretations.

What we all know to be true in the Dairy Industry is that Part-Time and Full-Time employees, whether they be salaried or waged, are entitled to Annual Leave, Sick Leave and Alternate Days. Salaried staff are entitled to Rostered Days off as well. Methods as to how these various leave types are applied in relation to salaried staff is explained in some detail below.

Annual Leave:

The Roster agreed to by both Employer and Employee is required in order to measure the number of days AL an individual is entitled to for any given season. It is important that the total number of days of AL days accrued over a season should reflect the daily accrual rate giving real-time accuracy and transparency. A selection of rosters with corresponding values of AL days are given as examples below:

12:2 all season

24.017 AL days per season

Accrued at 0.0658 days/ day

52 RDO’s per season

11:3 with 6:1 for 8 weeks

22.338 AL days per season

Accrued at 0.0612 days/ day

74 RDO’s per season

8:2, 8:3 with 6:1 for 8 weeks

21.8635 AL days per season

Accrued at 0.0599 days/ day

80 RDO’s per season

7:2, 7:2, 7:3 all season

21.024 days of AL days per season

Accrued at 0.0576 days/ day

91 RDO’s per season

It is vitally important that the roster in the employment agreement is used as the yardstick to measure AL accrual. Theoretically the roster may change due to nuances on the farm but the employment agreement and the datum numbers used within are what drive the entitlements for AL and RDO’s, so any variations must be measured and accounted for in fairness to the employees.

Rostered Days Off:

An added bonus of a system that accurately accrues AL based on the agreed roster is that system will accurately determine the number of RDO’s for a season which can then be measured accurately. (RDO’s are an entitlement and therefore should be measured)

Sick Leave:

New employees are entitled to 5 days of SL after 6 months of employment and then another 5 days per 12-month period from the date that they are entitled to their initial SL.

Example: Bobs’ start date of employment is July 7, 2016.

He is entitled to 5 days of SL January 7, 2017

He is entitled to a further 5 days of SL on January 7, 2018

In total Bob can accumulate up to a minimum of 20 days of SL unless more have been agreed to.

Alternate days:

When a salaried individual works on a public holiday they are entitled to time and a half for the hours they work plus an alternate day. The time and a half is the tricky part to figure out for the salaried employee as the measure is calculated based on an hourly rate. To ascertain an hourly rate, daily contracted hours of work (DCH) need to be established:

DCH (Same number is used over the entire season and must be well referenced in the Employment Agreement -This is a datum)

For the purposes of the examples below DCH = 10

RDO’s based on Roster 7:2, 7:2, 7:3 = 91 RDO’s

365 days – 91 RDO’s = 274 days

274 days ÷ 52 weeks = 5.27 days worked / week

Salary (TPV) of $61,000 ÷ 52 weeks = $1173.07/ week ÷ 5.27 days worked per week = $222.59/ day (Daily Rate of Pay) ÷ 10 hours (DCH) = $22.26/ hour.

We have determined an hourly rate for the salary based on 2 datums: The RDO’s and Daily Contracted Hours (DCH)

When a salaried employee works on a Statutory Holiday the pay received for that day is governed by the hours they work. DCH, which in this case is a datum of 10 is used in the formula.

Example: Bob works 3 hours on a statutory holiday: 3 x 1.5 = 4.5 hours. Bob is contracted to work 10 hours but can legally be paid for just the 4.5 leaving a shortfall of 5.5 hours at his hourly rate of $22.26 = a reduction in his standard salary of $122.43.

Example 2: Bob works 11 hours on a statutory holiday. 11 x 1.5 = 16.5 hours, his DCH is 10 hours/ day which leaves 6.5 hours x $22.26 = $144.69 will be paid in addition to his normal salary. In both examples, Bob will receive an Alternate day replacing the Statutory day which he worked. This alternate day can be taken at a day mutually agreed by Bob and his employer. If Bob were to leave with a balance of Alternate days owing he would be paid these days as part of his Final Leave calculations.

Wouldn’t it be refreshing to have a system that gave complete clarity to all matters relating to the various leave types!  Agrismart displays in an easy to follow format all leave taken, accrued, entitled, taken, paid out and more, completely removing the guesswork from an area of high importance to your staff. For New Zealand Dairy Farmers there is no other option that comes close.

Software built for NZ Dairy Farmers

Right throughout the animal kingdom there are examples of various types of mimics. Here in NZ we have our own selection of mimics. We have the Tui who can accurately mimic the call of the Bellbird. We have the common Blackbird and sometimes even the Starling who will occasionally mimic the sound of the telephone which has been known to actually catch the odd unsuspecting human running for the phone only to realise they have been duped by the mimic. Then of course, as far as compliance around time recording and measures against minimum wage, leave balances and payroll are concerned there are other possible options in the Marketplace that can actually be identified as mimics. As is the case with the Blackbird and the Starling that mimic the telephone it eventually becomes obvious that they are not the real deal.
Agrismart was initially created solely for NZ Dairy Farmers to deal with the complex compliance issues that the Dairy Industry is confronted with. Agrismart is the real deal, we are not mimics and we are here to help you look after your compliance. You will not have to twist, bend and manipulate Agrismart to suit your dairy business as we created Agrismart just for you.

Check out our video below to learn more:

https://vimeo.com/203223338

VIDEO – Roster Builder and Tasks

VIDEO – Mobile Overview

friesian cows

Why is MBIE Focusing Their Employment Audits on Dairy Farmers?

We often see articles in various media about breach in employment law within the Dairy Farming sector. So why does it make more headlines than other industries? Is the dairy industry being singled out and picked on unreasonably? To answer this, we need to understand the relevant legislation and then identify what is peculiar about the dairy industry that makes it a “target” for MBIE auditors.

The relevant legislation are the Employment Relations Act 2000 and the Holidays Act 2003. Under the above legislation you must be able to show that you’ve correctly given your employees all minimum employment entitlements such as the minimum wage and annual holidays.

A large proportion of employees in the dairy industry are on salaries, rather than on wages. You would think that being on salary is easier as all you need to do is pay the employee a fixed amount and the job’s done. This is the case for office workers as they often work the same hours each week and, as an example, don’t work statutory days. Contrary to this, dairy farm employees have varying working hours during the season and within pay periods as cows need to be milked daily. Because of this, an employee ends up having to work on a statutory holiday such as Christmas Day. In addition , there is often changes to the roster pattern during the season which results in a complex employment remuneration web to weave through.

IMPORTANT RULES AND REGULATIONS WE NEED TO ADHERE TO:
  1. The salary divided by the hours worked during a pay period can’t be below the minimum hourly rate
  2. The measure of the breach in the minimum hourly rate can’t be more than a fortnight e.g. you can pay an employee monthly, but you measure of the minimum hourly rate must be worked out on a fortnightly basis

So, let’s look at each component relative to the rules and regulations to understand the complexity it creates when an employee is being paid a salary:

1. Hours worked in a pay period

Employees that are on relatively low salaries are most at risk of breaching the minimum hourly rate. For example, an employee on $45k salary who is paid fortnightly can, at the most, work 109.89 hours a fortnight before breaching the current minimum hourly rate of $15.75. The threshold number of hours will drop to 104.9 hours when the minimum hourly rate increases to $16.50 from 1 April 2018. This variability of hours worked creates the need to be extra vigilant to ensure there is no breach of the minimum wage. However, if you have employees on high salaries, then this is unlikely to occur. The effect of any top ups has an impact on the amount that would be paid out as annual leave taken during the year.

2. Working on a statutory day

Anyone that works on a statutory holiday must be paid time and a half for the hours worked on that day, as well as receive an alternate day (except for casual employees) of leave which can be taken at a later date. In some cases, the salary could be less than normal if, for example, less than 6 hours is worked on a statutory day when the daily contracted hours are 9 hours. Again, any changes to the salary arising from adjustments from working on a statutory day has an impact on the annual leave amount.

3. The effect of rosters on annual leave

The statutory minimum requirement is 4 weeks of annual leave. The roster pattern determines how many days an employee works in a 7-day week. This is easy when someone is on a 5:2 roster, as in each 7-day period they work 5 days which equates to 20 days of annual leave (5×4=20). Likewise, a 6:1 roster is easy to calculate as 6 times 4 equals 24 days of annual leave. But what if you have variable rosters such as 8:2, 8:3 with 6:1 over calving? Or 8:2 with 6:1 over calving? It then becomes a lot harder to calculate. It is therefore imperative that you get your base correct. Furthermore, with variable and complex rosters, it is important to be able to differentiate between annual leave days and rostered days off when an employee takes annual leave. For example, if an employee who has a 5:2 roster takes 3 weeks of consecutive annual leave, it is  not 21 days of annual leave that is taken, but rather 15 days of annual leave where the remaining 6 days are normal days off.

So what peculiarities are there when an employee is paid wages?

1. Hours worked in a pay period

If you pay an employee an hourly rate (above the minimum rate) and you keep an accurate record of their hours, then there is no risk of falling below the minimum hourly rate.

2. Working on a statutory day

Anyone that works on a statutory holiday must be paid time and a half for the hours worked on that day, as well as receive an alternate day ( except for casual employees ) of leave which can be taken at a later date. Any changes to the wages arising from adjustments from working on a statutory day also has an impact on the annual leave amount.

3. The effect of rosters on annual leave

This has the same issues as if on a salary

It seems that paying someone wages rather than a salary poses fewer risks to the employer in the event of an audit. This is because it eliminates the issue of falling below the minimum hourly rate and removes the risk of overpaying employees when working on a statutory day. Although this seems more appealing to employers from a risk mitigation point of view, it may not be possible to convince employees to be remunerated that way. This is because there can be significant fluctuation in the amounts paid each time. Consequently, this variability in amounts paid may affect the employee’s ability to budget.

On the contrary, the relative certainty of amounts (not withstanding the variations discussed above) paid to the employee as a salary provides a degree of comfort to the employer as to what the employee remuneration  cost will be for the season.

Both ways of remunerating employees on the farm highlight the glaring need to have good clear records around hours worked and leave taken. It is because of these farming employment complexities that farmers are being targeted and warned by MBIE that they could face serious fines if they fail to keep accurate employment records for hours worked.

WHAT CAN EMPLOYERS DO TO ENSURE THEY COMPLY WITH THE EMPLOYMENT REGULATIONS?

Simply using a payroll system to pay an employee will not suffice as the underlying information behind that is what MBIE are after.

Historically, not much work was done by payroll companies for dairy farmers or the Agri-sector as it was all too difficult . As a result, farmers had to adapt payroll software that wasn’t specifically designed for them, which made it difficult for them to keep accurate records. This is no longer the case as there is software available that has been built from the ground up to help farmers to be fully compliant.

MINIMUM REQUIREMENTS FOR A FIT-FOR-PURPOSE PAYROLL SYSTEM FOR THE FARM
  1. Ensure there is an in-built calculator that can easily calculate the number of annual leave days in a year. This is vital as this is the starting point in measuring annual leave balances.
  2. Given the complexity of rosters, ensure the system can automatically calculate the number of days off an employee will have during the season. Also ensure that the system measures what has been taken as days off against the entitlement ensuring both parties are adhering to what is recorded in the agreement ( important for salaried employees but not for employees on wages as they get paid for every hour they work) .
  3. It is important that the system is optimised for all devices so time keeping, for example, can be done with ease on smartphones, tablets, and computers.
  4. It is essential that the system allows employees to confirm their hours worked in a pay period, with no ability for the employer or employee to change the records once both parties have confirmed it. This will ensure that in the event of an MBIE audit there will be no disputes regarding hours recorded.
  5. Once the hours are confirmed, it is vital that the hours flow seamlessly into the payroll system, account automatically for any minimum wage top ups, calculate annual leave/sick leave, and so on, without further manipulation.

Therefore, for farmers to comply with the relevant employment legislation, they need to have a fit-for-purpose payroll system that considers all the intricacies of their business.