Introduction

By now, employers should be aware of the upcoming requirement to report their pay information on a pay by pay basis to Inland Revenue from the 1st April 2019.  Leading up to this date there has been a flurry of activity as payroll providers have grappled with getting their solutions modified in time to meet this deadline. 

Inland Revenue provided different mechanisms for employers to send Payday Filing information and for correcting this information if required.  Not all of these methods are provided by all payroll providers and some approaches are easier than others.

What is Required

There are three parts that make up Payday Filing information:

  1. Employment information contains what you have paid your employees, and the tax and social policy deductions that you are obliged to collect
  2. New starters and leavers (also known as employee details) contains information pertaining to the people starting and ending in your organisation.  It also contains KiwiSaver opt in and opt out decisions.
  3. Employment information amendments allows an employer to make changes to previously filed employment information records

This information can be passed to Inland Revenue in different ways, from manual entry through Inland Revenue’s myIR web portal, to a file upload process, to software to software communication in which the payroll software can communicate directly with Inland Revenue systems (Gateway Services).  While the end result of these different approaches is the same, the effort involved and potential risk of error is not.

Risk and Effort

The table below demonstrates the different information required to be sent with pay day filing and the different mechanisms in which this information can be sent to Inland Revenue.  As you move progressively towards the right of the table, the less manual intervention is required and the easier the task becomes for the end user.

Ultimately, the more tasks that are automated by the software, the less time is needed by the pay office to meet their Payday Filing requirements.  Running payroll is already a time critical business process.  The introduction of Payday Filing shouldn’t increase compliance costs by increasing the time spent manually entering or correcting information, or navigating websites to manually upload files.

Additionally, with manual entry also comes an increased risk of mistakes.  These mistakes can result in subsequent rework to correct these mistakes through more manual amendments.

Summary

While all payroll providers are required to develop compliant Payday Filing solutions for their customers in time for 1 April, it’s clear that not all solutions are the same.  Solutions that provide an automated transfer of information for all types of Payday Filing information to Inland Revenue make it easy to meet requirements without increasing workloads.

Datacom Payroll solutions have adopted an automated approach to all three types of the Payday Filing information making the introduction and ongoing support of Payday Filing a simple process.  

For more information about our payroll solutions and services please contact the help desk on 0800 856 856 between 8:30am and 5:30pm Monday-Friday, where one of our consultants will be glad to help.