As a business owner who employs staff and/or if you pay yourself a wage, you have to make pay as you earn (PAYE) deductions to Inland Revenue. Your individual employees may have different tax codes and rates depending on their personal circumstances. You may also need to make deductions for child support, Kiwisaver or student loans. The PAYE deduction does include ACC Earner's levy though.
Starting April 1, 2019, business owners must do payday filing every time they pay their employees. This means if you have staff paid weekly or fortnightly, you'll need to do this filing just as often.
Why Does it Matter? Payday filing gives Inland Revenue information on the day the payments are made, ensuring their systems are as up to date as possible.
What Do You Need to Do?
When you pay your employees, you'll need to fill out an online form with:
- Details about the pay and pay schedule.
- Info on any new or leaving employees, like when they started or finished, their contact details, and date of birth. Make sure to do this before their first payday.
How Can You Make Corrections?
If you need to fix anything, you can do it online instead of filling out paper forms. But remember, you can't make negative adjustments.
How to File:
- Electronically: If your PAYE and ESCT deductions add up to $50,000 or more annually, you must file electronically within two working days after payday.
- Paper: If your deductions are under $50,000, you can still file by paper. You'll have 10 working days after payday or by the 15th of each month if you pay twice a month.
No Changes to Payment Dates:
The dates for actually paying your PAYE won't change. They'll still be the same—either once or twice a month. This depends on whether your business withholds less or more than $500,000 per year.
Flexibility in Payment Frequency:
You can choose to pay more often if you want, but it's not required. So, while you'll be reporting more often, you won't be paying taxes to Inland Revenue any differently.
Keep these changes in mind to stay compliant with the new payroll rules!
... Sound confusing?
Using WE Accounting & Business Services for payroll services is a great way to ensure accuracy, safeguard confidentiality of wage information and ensure Employment Law is being adhered to with regard to leave entitlements & Kiwisaver. For more information on how WE can help you, contact WE.
PLEASE NOTE: The information contained in this document is for information purposes only and should not be relied upon as a substitute for professional advice. For further information and advice please contact WE Accounting & Business Services Ltd Chartered Accountants.
