At the moment your employee's income information is reported to the IRD once a month on the employer monthly schedule. This means that tax and other payments, such as entitlements from the Government are often based on old information that doesn't accurately reflect a person's financial situation.
Proposals for PAYE reporting in the future are as follows:
- You would be required to file PAYE information within seven working days of paying wages. This is voluntary from 1 April 2018 and proposed to be mandatory from 1 April 2019. Payment of PAYE would stay the same, namely 20th of the following month.
- If you use payroll software you would be able to file directly from the software.
- In order to get more accurate payroll information, you would be required to gather and provide to the IRD your employee's date of birth information and contact details for all new employees..
- Many small businesses are already moving to online services (such as iPayroll and Thank You payroll) so the Government believes the subsidy is no longer necessary and it is proposed to this will end from 1 April 2018.
- The threshold for compulsory electronic filing of PAYE information would reduce from $100,000 a year of PAYE and ESCT deductions to $50,000 / year.
Talk to us about what these changes mean for you