Switching to Payday Filing

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From 1 April 2019 it will be mandatory for employers to submit payroll information and employee information to Inland Revenue every payday rather than once a month, so if you haven’t already, you need to start thinking about how this will affect your business and the PAYE returns filing processes you already have in place.

This change aims to simplify the filing process for employers and ensure an employee’s current financial situation is more accurate and give them more clarity about their tax payment obligations and entitlements.

PAYE payment due dates are unchanged but you must submit employment information within two working days of paying your staff or within ten working days if you are a paper filer.  The new online forms will provide space for these extra employee details.

PAPER FILING

If your PAYE/ESCT is $50,000 or more a year, you’ll have to file electronically either through payroll software or myIR.  If your PAYE/ESCT is less than $50,000 a year, you will be able to payday file with the paper return still if you want to.  From March you will receive Employment Information (IR348) and New Employee Details (IR346) forms every month.  These replace the Employer Monthly Schedule (IR348) forms.

ELECTRONIC FILING

There are three options for electronic payday filing:

  1. Direct from payroll software (if supported by the software), just send in your first employment information schedule and you’re all set.  A myIR account is a pre-requisite for this option as your myIR credentials are required to authorise any file submissions from your software.

Opt in via myIR and either:

  1. Upload info to myIR in the Payroll returns account; or

  2. Complete information onscreen in myIR in the Payroll returns account.

You can “opt in” in the MY BUSINESS section of myIR.  Once you’ve opted into payday filing only the myIR account owner will have access to the Payroll returns account.  The owner can delegate access to other users through Manage Account Access in myIR.  If someone else prepares the PAYE returns for your business make sure they are aware of the changes happening in April 2019 and arrange myIR account access for them beforehand.

Inland Revenue has released the following guide which shows step-by-step instructions for how to switch to payday filing.We recommend that you read this now, check out the IRD website and put immediate steps in place to start the switch to payday filing.

Joanne Whyte