What is payday filing?
Payday filing is an online filing option to send employee PAYE information to Inland Revenue (IRD). While this is currently voluntary, it will become a mandatory requirement from 1 April 2019. Under the new scheme employers who make PAYE/ESCT deductions of more than $50,000 per year must file their Employer monthly schedule after each payroll instead of each month. Payday filing will become a part of your normal payroll process and will eventually make things easier as you’ll no longer need to remember to send returns at the end of each month.
There are three different options for electronic payday filing – here's how to get started:
1. Direct from your payday filing supported payroll software. This service lets businesses file their payroll information directly from their payroll software without having to upload the file via myIR. You don't need to do anything to elect to use payday filing. 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 the IRD.
Payday filing hasn’t been rolled out for MYOB or Xero yet but we’ve been assured that they’ll be ready by 1 April 2019. If you are currently on MYOB or Xero Payroll we would recommend not opting-in to Payday filing until the software has been updated.
2. Upload to myIR in the Payroll returns account. if supported by software provider, you can upload files in myIR in the Payroll returns account. You can send your information through File return or File transfer link.
3. Onscreen in myIR in the Payroll returns account. You can opt in under 'I want to' in the 'My business' section of myIR.
Inland Revenue have changed the way businesses file their employee information to make it simpler and faster for you to meet your business tax obligations, improving how you manage your payroll process an important part of this. If your business isn’t currently on payday filing supported payroll software, we would highly recommend considering adopting this in order to ensure you’re payday filing ready.
If you are filing electronically (either through payroll software or myIR), you’ll have to submit employment information within two working days of paying your staff, or within ten working days from 1 April 2019 if you're a paper filer.
The increased filing frequency may appear burdensome but with our technology partners (Xero/MYOB) stepping up and streamlining the payroll process with accounting software integration with the IRD, the filing process should be a lot easier.
What to do next?
Start thinking about how you'll make payday filing part of your payroll processes before it becomes compulsory in April 2019.
Unsure if you’re captured by the new payday filing requirements or have concerns about your current payroll system? Get in touch with your Nexia Partner or Client Manager and we’ll advise how to make your payroll work for you.