Change to pay­day fil­ing made by IRD

CHB Mail - - Tuki Talk -

By CHRIS GUILLEMOT Part­ner — Busi­ness Ad­vi­sory Crowe Hor­wath

From 1 April 2019, it will be­come com­pul­sory for all em­ploy­ers to adopt pay­day fil­ing — dis­clos­ing their em­ployee pay de­tails on a pay­day ba­sis in­stead of fil­ing the cur­rent IR345 with the monthly to­tals.

This also ap­plies to pay­ments made to con­trac­tors’ sub­ject to with­hold­ing tax. PAYE and With­hold­ing Tax will still be paid on the 20th of the month fol­low­ing (or twice monthly for larger em­ploy­ers).

For em­ploy­ers with more than $50,000 of an­nual PAYE and Em­ployer Su­per­an­nu­a­tion Con­tri­bu­tion Tax (ESCT — tax on Ki­wisaver con­tri­bu­tions by the em­ployer) it will be com­pul­sory to file elec­tron­i­cally and within two work­ing days af­ter the pay­day.

For smaller em­ploy­ers, you can opt to sup­ply the in­for­ma­tion twice monthly or on a pay­day ba­sis. You can sup­ply a pa­per re­turn within 10 work­ing days af­ter the pay­day. But the ex­tract be­low from the IRD web­site sug­gests that even if you are a smaller em­ployer, there is no 10-work­ing day rule for con­tract pay­ments and with­hold­ing tax, and the re­turns must be filed within two work­ing days:

Pay­day fil­ing for sched­uler pay­ments

If you choose to use pay­day fil­ing you don’t need to pro­vide con­trac­tors’ de­tails such as date of birth, start and end dates and contact de­tails if you don’t have them. You can in­clude your schedu­lar pay­ments in­for­ma­tion when you file your em­ploy­ment in­for­ma­tion on a pay­day ba­sis, i.e. when you pay con­trac­tors, or on a twice-monthly ba­sis.

Sched­uler pay­ments made:

- be­tween the 1st and 15th of the month must be re­ported to us within two work­ing days af­ter the 15th of the month.

- from the 16th to the end of the month must be re­ported to us within two work­ing days af­ter the end of the month.

So, with all this tax sim­pli­fi­ca­tion lead­ing to more in­for­ma­tion fil­ing to IRD each time a new law is bought in, ask your­self:

Can my sys­tems cope with the changes? Is all my pa­per­work up to date and com­pli­ant?

It is timely be­fore 1 April rolls around to check with your pay­roll soft­ware provider to en­sure that, come im­ple­men­ta­tion date, you will be able to file the in­for­ma­tion within the time­frames thatIRD has in­tro­duced.

Given that In­land Rev­enue is go­ing to have more timely ac­cess to your pay­roll in­for­ma­tion, it is equally im­por­tant to en­sure your pay­roll doc­u­men­ta­tion is up to date. Check: Do all em­ploy­ees, per­ma­nent and ca­sual, have con­tracts? Have they signed valid tax code dec­la­ra­tions that you hold on file?

Do you have con­tracts with your sub­con­trac­tors? Do you hold a copy of their ex­emp­tion cer­tifi­cate if their pay­ments are be­ing treated that way?

If you are un­sure of these or any other pay­roll is­sues, the time is now to get things sorted.

■ This in­for­ma­tion is gen­eral in na­ture and read­ers should seek spe­cial­ist ad­vice be­fore mak­ing fi­nan­cial de­ci­sions.

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