I am sure you have heard about the upcoming changes to how employers must file their PAYE information with IRD.
The new rules will affect all employers, no matter how small.
For those of you who haven’t opted to change to payday filing already, it will become compulsory as of 1st April 2019.
The idea is that better quality and more timely information will be available to Inland Revenue whilst concurrently streamlining processes at the employer end. Integrating the filing of information with IRD with your existing pay run process should save you time in the long run by removing the need to perform an additional filing task at the end of each month. You will still, however, need to pay IRD your PAYE deductions each month as has been done previously.
Additionally, you will no longer need to file NIL returns if you have not paid any employees during the pay period and the old Employer Deductions form (IR348) will cease to exist.
What the change means:
- Payroll information will need to be filed with IRD within two days (if filing online) or 10 days (if filing by paper) after each payday.
- If you engage subcontractors with withholding tax deductions, you can opt to either:
- Include their pay data when filing your other employee pay day information on your usual payday filing date.
- File their information twice monthly, within 2 working days of the 15th and last day of the month.
- You will need to provide new and departing employee’s address and date of birth information to IRD and ensure you have informed your employees that this will occur (adding a line to employment agreements is a good way to fulfil this requirement).
- From 11th March the ir-File service in MyIR will be replaced by “Payroll Returns” which will begin showing in your MyIR account from 28th February
What you need to do:
If you are already using a payroll intermediary such as SmartPayroll, or iPayroll…..NOTHING….These intermediaries will have already taken care of transferring you over to pay day filing and will ensure your pay day filing obligations are completed.
If you are using Xero Payroll… as of 1st April Xero will integrate with IRD. There won’t be a big change to how you currently process your pay run. Filing will be simpler and you won’t need any software updates. The current process of manually uploading your files to myIR will no longer be required. Instead you’ll be able to file your pay run and employee information straight from Xero Payroll after each posted pay run.
If you are currently recording and calculating your payroll manually; you can continue to do this if you wish, ensuring that you file your payday data with IRD within 2 working days (if using MyIR) or 10 workings days (if filing on paper) of each and every pay-run. However, making use of payroll software will make life a lot easier.
Xero is currently offering a special deal to new clients looking to sign up for their payroll software before 31st March. If this is you, please get in contact with us to discuss your options.