The payroll landscape is constantly changing, and not just for businesses and staff, but those of us who have responsibility of ensuring employees pay is correct. The Payday Reporting legislation is currently before parliament and proposes to change the way payroll information is reported to the IR. Currently reporting is done on a monthly basis by way of filing our PAYE returns (EMS and EDF schedules along with Kiwisaver forms).
Some small businesses use software and file these via the MyIR channels now once a month. The proposal is a significant change to the way companies report payroll information to the IR and you will need to ensure you software is compliant before 1st April 2019 (this is when pay day reporting will be compulsory, voluntary from 1 April 2018).
Payday Reporting is a initiative that changes the way businesses report on employee payments such as salary or wages, pay as you earn (PAYE) and other deductions. Under Payday Reporting, this payroll information will be sent electronically directly to IR at the same time as the employer pays their employees. You will no longer be required to file monthly returns but payments will still be made to IR monthly.
Employers with $50000 or more of PAYE and ESCT deductions (which is the threshold for electronic filing), will be required to comply with the new regulations by 1st April 2019. You may need to upgrade to compliant Payday reporting software and review your payroll procedures. We recommend you start thinking about this now as over 50000 employers in NZ will need to transition to Payday reporting in a relatively short period of time.
So not only are there changes to frequency of filing, there is internal changes at IR with their transformation project to contend with at the same time. This will certainly make life interesting for bookkeepers and accountants next month.
The bill is still to pass through parliament but it certainly seems imminent. Contact our office for further information and advice, we are always happy to help.