What is payday filing?

Currently, employers file their employees’ earnings and PAYE information to Inland Revenue once a month, regardless of how frequently they pay their employees. Under the new Payday Filing (rules which are compulsory and coming into effect from 1 April 2019) this information will need to be reported to Inland Revenue every time employees are paid. The due date for the payment remains the same at the 20^th of the month (or 5^th and 20^th of the month for twice-monthly filers).

What does it mean for employers?

Employers will need to:

1. File employment information to Inland Revenue within two working days of paying staff
2. Provide new and departing employees’ address and contact details, and their date of birth (if they have supplied you with the information)
3. If your annual PAYE and ESCT deductions are $50,000 or more, you will need to file your returns online

How do I file the Payday Returns?

1. Directly from your payroll system

If supported by your software provider, you can file directly to Inland Revenue without having to upload any files through myIR. This means you’ll:

• no longer have to file upload in myIR
• be able to set up your employees with the right information from the start
• make adjustments and be able to amend information you’ve already filed.

Your software will need to support the new employment information and employment details file, along with some KiwiSaver files. Check with your software provider if it can. When you’ve completed and submitted these files they’ll transfer from your software directly to Inland Revenue. You’ll need to use your myIR account user ID and password to authorise these submissions from your software. This is a one-off process to establish a link between your software and Inland Revenue.

2. File upload to myIR

If supported by your software provider, you can upload files in myIR in the Payroll returns account. This account will only appear once you’ve opted into payday filing. You can send your information through File return or File transfer link. From here, the process is similar to ir-File.

3. Onscreen myIR (for smaller pay runs)

If you have smaller pay runs, you can use the Inland Revenue’s onscreen data entry method in myIR in the Payroll returns account. Onscreen filing is similar to the current process for filing your Employer monthly schedule (IR348).

Payroll Systems

Xero Payroll

Payday filing will actually be come simpler if you use Xero Payroll. Currently you have to still manually file your PAYE returns with Inland Revenue. However from 1 April 2019 you will be able to file the returns directly through Xero. Xero will contact you directly once the Payday filing is available.

If you use Xero Payroll, they are currently offering a free 45 minute webinar which will explain how Payday Reporting works within Xero Payroll. https://www.xero.com/nz/training/small-business/setting-up/getting-ready-for-payday-filing-in-xero/

MYOB

If your accounting system is MYOB Payroll, please follow the below link as to what you need to do to get ready for Payday Filing:

https://www.myob.com/nz/support/payday-paye

SmartPayroll

As SmartPayroll already handles the filing of your monthly returns to Inland Revenue, you do not need to do anything differently. Lastly, if you require any assistance, or have any questions about Payday Reporting, please contact our office and we can provide you with some further information.

 

The Best Start tax credit (BSTC) is a new component of Working for Families Tax Credits (WIFTC). It is a payment to help families with the costs in a child’s first three years. It is available for all qualifying families with children due or born on or after 1 July 2018.

The BSTC replaces the Parental Tax Credit (PTC). If a child is born before 1 July 2018 but had an expected due date after this, a person qualifies for BSTC. However, if a person also qualifies for PTC, they need to choose which payment is best for their family — they cannot receive both.

A person cannot get BSTC and paid parental leave (PPL) for the same child, at the same time. The BSTC will start once the PPL has finished.

Paid parental leave is extending from 18 weeks to 22 weeks from 1 July 2018 for babies born or expected to be born on or after 1 July 2018. This also means the number of keeping-in-touch hours has increased from 40 hours to 52 hours, Keeping-in-touch hours allow an employee who is on parental leave to stay connected with their employer and perform work from time to time, such as attending a team day.

A person can also get BSTC while they receive any of the following for children in their care:

• Orphan’s Benefit

• Unsupported Child’s Benefit, or

• Foster care allowance.

The amount of BSTC is up to $60 a week ($3,120 a year) per child for babies born on or after 1 July 2018. All eligible families will receive this payment until the child turns one, regardless of their household income. Households whose income is less than $79,000 will continue to receive $60 per week until the child turns three. Those earning above $79,000 may continue to receive payments at a reduced amount. The upper threshold is $93,858 (for one child) when payments stop.

More information is available at the Inland Revenue website: www.ird.govt.nz.

If you have an account with an offshore financial institution, including accounts maintained with certain offshore trusts, information about your overseas investments will soon be shared with Inland Revenue. Click here for the Ministry of Business, Innovation and Employment summary of what you need to know.

Whether you’re a sole trader, contractor or employer, there are a number of important tax changes you need to know about. Click here to read detail about changes to Payday filing, my IR, Global Tax evasion and the introduction of Accounting Income Method (AIM) Provisional Tax. While we don’t recommend AIM for most people, you are welcome to contact the team to discuss AIM in further detail free of charge.

IRD are shutting off access to their system for 5 days from today 12 April, to “improve” their system. This NZ Herald article (click link) is a reminder to us that, should IRD investigate one’s business or financial affairs, we need the right to ask them on what basis. Case Study Several years ago, one of our clients was investigated on the basis of what proved to be a wrong assumption by the Revenue. Based on the type of business these clients were in, the Revenue expected a certain percentage of their earnings to be received in cash, rather than by electronic payments. Because this business banked lower amounts of cash, Inland Revenue audited them on the assumption that they were hiding some $50,000 per annum, a not insignificant amount for a family run business. (more…)

The time of year to check for tax refunds is approaching. This New Zealand herald article shows a step by step guide on how to check if you are due a refund. (more…)

The Ministry of Business, Innovation and Employment have summarised key law changes for 2017. Click here to find out about Minimum Wage Rise, Tax for Contractors, ACC levies, Parental leave payments and more.

There will be a complete outage of IRD Online Services as below:

• On Saturday 12 August 2017 services will be unavailable from 1.00pm and the estimated time for the services to be back up is Saturday 12 August at midnight.
• On Saturday 19 August 2017 services will be unavailable from 1.00pm and the estimated time for the services to be back up is Saturday 19 August at midnight.

At present, if you do business with a company, and it has significant tax debt, which weakens its cash position, you have no way of knowing about this liability. Effective 29 June 2017, Inland Revenue will be able to disclose information about companies which have tax debt over $150,000, to approved credit reporting agencies. While we will not be able to obtain this information directly, a request through one of the credit agencies will reveal a significant tax debt. (more…)

NZ’s Inland Revenue have announced a new student loan calculator. It says: You can use it to find out:

• how long it will take to get loan-free
• how extra repayments can get you loan-free faster, and
• if you’re an overseas-based borrower – how to save on interest. Click here

For more information on personal accounting take a look at our services page.