Payday Filing: A Practical Guide for Busy People

The Nitty Gritty

It’s the most important and least exciting news of the year. There’s about to be serious change in the way Kiwi employers file with Inland Revenue. IR has been spreading the word, and a lot of small business owners are talking about the big transition. But what does Payday Filing actually mean?

Payday Filing is a push towards taking employer admin digital. Under the new rules, kiwis paying over $50,000 PAYE and ESCT per year need to file employment information online within two days of paying their people. This method replaces the monthly IR348 ‘Employer Schedule’ form, the one that gives details about your employee’s pay and deductions. This is part of a broader Inland Revenue Department overhaul, with big updates to their website and changes to the tax refund and tax code processes.

Get Ahead

If you’re with PaySauce, you’re covered - our customers are already fully compliant with the new rules. Otherwise, you need to take action. It really is a good idea to get onto Payday Filing, because after April, it’s the law. If you’re not properly prepared, you’ll be at risk of fines and penalties. There will be some leniency; although most payday filers will have multiple due dates in each month, you can only be charged one penalty per month, even if you miss more than one filing date. Still, the risk of missing any is considerably higher.

If you start now, the training wheels will be off by the time the deadline rolls around. To kick things off in advance:

1. You’ll need to be using a ‘myIR’ account
2. You’ll need to opt-in to payday filing

While your filing schedule will look pretty different, your actual payments won’t be affected. The due date is still the 20th of the month (or 5th and 20th for bi-monthly). And you’ll no longer need to file an IR345 (Employer Deductions), because you’ll be sending deduction info each payday.

IR also wants you to provide additional details about new employees. Once you’re onto Payday Filing, you’ll have to pass on start and end dates, contact details and date of birth. You may need to update your hiring forms or processes.

If you’re below the 50,000 ESCT threshold, you can keep filing on paper. Under Payday Filing, you'll need to file your information within 10 working days of payday. But if you don’t go digital, you can’t make the change early. You’ll have to stick to the old schedule and forms until after the April deadline, which means no grace period to suss the new system out.

I’m a PaySauce customer. So I’m already compliant?

First of all, thanks! We’re so glad to have you. We’re pleased to say PaySauce people are ahead of the curve and already filing each payday.

Here’s what’s happening behind the scenes.

We’ve updated our software so that you’re already opted-in to Payday Filing. We’re linked directly into IR, so all your extra paperwork is already being filled in online, using your payroll details. This has been happening since the end of November, and will continue to happen in exactly the same way when April arrives.

Help!

Most of us aren’t too enthusiastic about payday getting even more complicated. Recent numbers say that only about 5% of New Zealanders are grabbing the bull by the horns, with the vast majority not yet on Payday Filing. If you’re in that group, you might want to consider handing your payroll over to the experts. A payroll provider guarantees that you won’t get caught out by deadlines and fines, or bogged down in increasingly knotty payroll processes.

PaySauce is the national leader in Payday Filing, has a heap of smart features for employers, and we’re a pretty decent bunch. Give us a call on 0800 746 701.