When you’re running your own business, it’s important to get your financial processes set up properly. Getting it wrong - or delaying the task - can become a costly mistake.
Payday filing has been an option since April 2018, but from April 1 2019 it's becoming compulsory. When you’re trying to understand legal requirements, the last thing you need is somebody muddying the waters. Unfortunately, there’s been some misinformation spread about payday filing. Perhaps you’ve read this article.
That’s why our focus is on what’s required of you, so you can get things in motion. In this blog, we explore payday filing, the easy way!
How is payday filing different?
If you’ve been in business for a while, you know the old method. Every month, you’d file employee earnings and PAYE information with the IRD. It didn’t matter how often employees were paid, you’d have to submit an employer monthly schedule.
With the new payday filing method, the information is reported to the IRD each time you pay your employees. After every payday, you’ll submit an employment information schedule. This change will make it more obvious to the IRD when employees’ tax obligations and entitlements aren’t being met.
How can I prepare for it?
If you use payroll software, have a chat to your provider to find out how they’ll support payday filing. You might need to upload a file in myIR, or you might able to file directly to the IRD through your software. Either way, you must be ready to go with payday filing by April 1 2019, so don’t let this issue sit.
After each payday, you’ll have two working days to file the returns if you’re filing electronically. If you’re filing on paper, you’ll have 10 working days.
Ways to payday file - do you use cloud payroll software?
Larger companies (those that deduct more than $50,000 in PAYE and Employer Superannuation Contribution Tax) have to file electronically, however, everyone else can file on paper.
If you're still filing by paper, these changes mark a good time to reassess your systems. Are you filing in the most efficient manner? Is staff time wasted on laborious administration and data entry?
Anyone who remains filing by paper will have extra work, which makes now the perfect time to shift to a cloud-based service.
A move to cloud payroll software might be the key to removing the stress. Or, having a PAYE intermediary will relieve the burden of filing returns and payment.
It’s good to arm yourself with knowledge. In order to understand the switch in depth, visit this IRD page. Their resources include videos explaining how payday filing benefits both employers and employees, and detailing the ways you can file online.
Before April 1 rolls around again, make sure you’re ready for the new payday filing.
We can’t stress enough… everyone should be making the change now!
If you’re not sure what payday filing means for your business, or you’d like support through these changes, get in touch for a coffee and chat. We’ll set you up the RightWay!