When does payday filing begin?
Currently you can voluntarily choose to payday file instead of filing an Employer Monthly Schedule (IR348) every month. However, the much-anticipated payday filing regime kicks in as compulsory for all employers from 1 April 2019.
What is payday filing?
Payday filing requires employers to file their Employer Information (EI) every time they complete a payrun, as well as employee details for new and departing employees. There is a mandatory electronic filing requirement for employers who pay $50,000 or more in PAYE and ESCT deductions per year. This therefore means that businesses below this $50,000 threshold have the option to file electronically or via paper returns (only available from April 2019). If you choose to file electronically, you must file your EI within two working days of the payday. If you file by paper, you’ll need to file your information within 10 working days of the payday or within 10 working days of the 15th and end of the month if you choose to send your information twice a month. However, with the increased frequency of filing, paper returns could mean your payroll process could end up taking you more time than it does currently. The electronic method of filing will be the easiest and quickest way to comply with the new payday filing requirements.
Do I still need to file Employer Monthly Schedule and Employment Deductions forms?
The introduction of payday filing will result in changes to how you will file your payroll information to the IRD. The ir-File service in myIR will be discontinued on 11 March 2019. Instead, you will file using the Payroll returns account in the Business tab section of myIR to file your final Employer Monthly Schedule (IR348) and your Employment Deductions (IR345). Make sure that for your final returns, you make the payment(s) for that IR348 on the normal required due dates. Once you begin under payday filing, you will then use the Payroll returns account in the Business tab section of myIR to file your EI each payday and to submit any new employee details before or on their first payday. You will no longer be required to file an IR348 or IR345.
What Employer Information (EI) is required to be filed?
Your EI file will require much of the same information as the current IR348 however you will also be required to submit ESCT for each employee, pay period start and end dates, pay cycle, payday date and additional information about new and departing employees. There are no changes to current payment due dates or the frequency of your payments to the IRD.
How do I file my Employer Information (EI) and employee details online?
There are 3 ways of electronically filing your employment information online:
This is the most painless way to comply with your new payday filing obligations. If you are on an online accounting software package that supports filing directly to the IRD, you can file the new required information without having to upload any files through myIR. If you are on MYOB Essentials (released in the week commencing 18 February 2019) or Xero (from 18 March 2019), you simply submit your EI within the software as part of the payroll process.
This means you will:
If you are on an accounting software package that supports this function, you can upload files in myIR in the Payroll returns account. You can then send your information through File return or File transfer link – ie. Similar to ir-File currently. If you are using MYOB’s SME desktop products such as ACE Payroll, MYOB Payroll and IMS Payroll, you will be able to generate and download the new EI required for payday filing. The EI file will then be able to be exported and uploaded to the Payroll returns account in myIR.
If you have small payruns, you can opt to use the onscreen data entry method in myIR in the Payroll returns account. This method is similar to the current process for filing your IR348.
You will use the New/departing employees’ function in your Employees tab within the Payroll returns account in myIR to submit new or departing employees’ details.
What if someone else files payroll on my behalf?
If you need to delegate access to your Payroll returns account to another user who processes your payroll, as the owner of the myIR account you will need to do so in order to meet your payday filing requirements.
What should I do now?
The increased compliance requirements that payday filing imposes upon employers is a timely reminder to re-look at your current payroll processes and to discuss with us whether there might be a more appropriate payroll solution that could save you time and money and ensure that this transition to payday filing is as painless as possible. An online payroll solution such as MYOB Essentials also extends the service offering of a payroll intermediary which means the system will not only meet your filing obligations to the IRD but will also make your IRD payments and pay your employees once you have finalised your payruns. There may also be further benefits to you of being on an online payroll solution that integrates with your bank transaction data and your invoicing and purchasing system which can create further efficiencies for your business. Please contact our team before 1 April 2019 to discuss how Giles & Liew Chartered Accountants can assist with making the switch to payday filing as painless as possible and to discuss how we can help to improve your accounting systems and processes.
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