In a recent speech, the Minister of Revenue has stated a range of changes and proposals that will impact on payroll in the years to come. NZPPA sees these as a positive step that will aid and meet the needs of business and reduce work and compliance costs for payroll. We will keep you informed of developments.
Payday Reporting
Effective from 1 April 2019, we are proposing to replace the requirement for an employer monthly schedule with ‘payday’ reporting of employee information. So as part of the payroll process, you can integrate the next step, the provision of PAYE information to Inland Revenue. Do it all at once, direct from the payroll software, on the payday timetable your business has established, not a date set by Inland Revenue. Specifically:
- employers using payroll software, payroll intermediaries and those above the electronic filing threshold will report their PAYE information within 2 days of payday
- those below the electronic filing threshold and not using software will have 7 days after payday to report.
Reduced threshold for electronic filing PAYE information
The proposed new threshold of $50,000 a year of PAYE and ESCT will still exempt the smallest organisations. As an indication, it would require an employer with four full time employees at the average wage (or ten full timers at the minimum wage) to file through Inland Revenue’s website or through payroll software. And there will be an exemption from electronic filing for any employers who cannot access digital services.
Paying PAYE at the same time you pay your staff
We also listened to your feedback on the proposal that employers pay PAYE to Inland Revenue at the same time you pay your staff. While some commented that this would reduce compliance costs, a number of businesses were concerned about cash flow. It’s worth noting that this money doesn’t belong to the employer and is effectively held in trust until it is time to pay it to Inland Revenue. Paying it to Inland Revenue on payday could:
- further reduce compliance costs,
- potentially reduce the likelihood that the money is used for other purposes and
- enable PAYE and deductions of KiwiSaver contributions, student loan repayments and child support payments to be passed on more quickly.
In light of the submissions, the Government decided not to require employers to pay their PAYE and other deductions to Inland Revenue on payday. The current payment obligations, either twice monthly for the largest employers and payroll intermediaries or monthly for the rest, will remain the same. (However, if employers want to take advantage of doing everything at the same time including paying Inland Revenue on payday they will be able to do so.)
Ending Current Payroll Subsidy
In line with the more widespread use of electronic services, the Government has also decided to end the current payroll subsidy from 1 April 2018.
To access the Ministers full speech, go to: http://taxpolicy.ird.govt.nz/news/2017-03-09-speech-ema-annual-payroll-conference#speech
NZPPA supporting payroll since 2007!