Get ready for payroll changes from 1 April 2018

Date: 9th January 2018

If your business is using a manual paper-based or spreadsheet-based system, or off-line software for your payroll, you may like to consider modernising before the beginning of the new financial year. From 1 April 2018, Inland Revenue is introducing significant changes to the way employer payroll returns (PAYE) are filed.

For employers not using payday software linked to Inland Revenue’s online portal, these changes will make payday administration more complicated and time consuming.

Time to throw out the paper system?

flying paper

Let’s check out the two main changes in store.

Inland Revenue’s proposed payroll changes

The following changes may be voluntarily adopted from April 2018, and are mandatory from April 2019:

  • Employers will need to submit all payroll data (Gross, PAYE, Kiwisaver, Student Loan, etc) into Inland Revenue’s system every time they run their payroll. They will have two business days after each pay run to give their data to Inland Revenue. This replaces the current once a month filing, and could mean some businesses need to file with Inland Revenue up to five times per month.
  • All payroll data must be filed digitally through Inland Revenue’s online portal

So it makes sense to use specialty payroll software that does this automatically, right?

Payroll Intermediary subsidy may go

Inland Revenue is also proposing changes to the payroll subsidy which may or may not happen. Currently, Payroll intermediaries, like Thankyou Payroll, receive a subsidy provided by Inland Revenue. These payroll intermediaries manage the Inland Revenue filing side of payroll for their clients, on top of giving them an easy to use payroll tool. In return for accurate data and on-time payments, Inland Revenue has been providing a subsidy.

But this subsidy may be removed, meaning companies like Thankyou Payrol who rely on this subsidy as their main source of revenue, may have to increase fees.

What can you do?

If you don’t use one already, we highly recommend an online payroll system that links to the Inland Revenue online portal. Once it’s set up (something that we can help with) you’ll find payroll and PAYE processing so much simpler and faster.

To find out which payroll system is best suited for your business’ needs, please contact us.

More about payroll

Thankyou Payroll to change in line with legislative changes

5 reasons why you should take your payroll online

Ringing the changes in payroll

Posted in: Alexandra, Latest News, Queenstown, Wanaka