Payday filing allows employers to replace the IR348 Employer Monthly Schedule form with online submission every payday.
Online submission is currently voluntary and has been available since April, 2018.
From 1 April 2019, all businesses employing staff will need to transition to filing employment information monthly to every payday in line with their normal payroll cycle.
This change is designed to give Inland Revenue more certainty about employees’ tax obligations and entitlements.
Payment dates for PAYE and other deductions will remain the same.
What is Payday Filing?
Payday filing involves sending information to Inland Revenue electronically, although smaller employers will still be able to send the information by paper.
The online system allows employers to:
- send employment information with the normal pay cycle e.g. pay details of your employees
- inform the IRD of new or departing employees. This includes the start and end dates of employment along with contact details of the employee. Note that if you have new employees this detail needs to be filed with IRD prior to their first pay day.
Employees can file their PAYE and ESCT (Kiwisaver) deductions online if they are likely to total $50,000 or more for the income year. This will need to be done within 2 working days of payday.
From 1 April 2019, those with deductions less than $50,000 will be able to file either electronically or by paper. You’ll have 2 days to do this if you file electronically, or 10 days with the paper option.
Note: Regardless of the size of your payroll, you must file electronically if you opt in to payday filing before April 2019.
How do you set it up?
You can opt in via your MyIR account. Once you’ve opted in, payday filing will commence at the beginning of the month after you have opted in.
If you use payroll software, it is likely that your vendor will have the ability to file all the information directly with Inland Revenue. It’s likely you’ll need to use your MyIR account user ID and password to authorise the submission from the software. Contact your software vendor to learn more.
Remember, this system is currently voluntary until 1 April 2019.
Payments are still made at the same time as you currently pay IRD. You still need to file an IR345 Employer Deductions form.
This article is very general and there is much more information available on the Ministry of Business, Innovation and Employment site by clicking here. Inland Revenue also have much more information on their site here.