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Integrate PAYE into payroll software

What issues do you have with current PAYE processes?

In a 2013 survey of small and medium enterprises (SMEs) carried out for  Inland Revenue, the median value for time spent on PAYE and KiwiSaver obligations was 21 hours a year.

Feedback suggests that many employers find their PAYE role onerous.  The system was designed for a paper-based world and it creates problems for employers and employees, and it does not deliver information to government in a timely or accurate way.

Feedback has identified the following concerns for employers with the current PAYE information process:

  • difficulties in setting up new staff;
  • problems changing deductions;
  • difficulty in making changes to information already filed;
  • problems with understanding and reconciling the information Inland Revenue makes available to employers; and
  • concern about the time it takes Inland Revenue to process  employer monthly schedules and action amendments.

Questions

1.  Are these the key areas of concern with the PAYE information process from an employer’s perspective?

2.  Are there other aspects of the process of providing PAYE information that are significant sources of frustration/wasted time that should be rectified?

Comments

Gavin Baxter
I manage two payrolls - one for a medium sized school (50+ employees of various status) using payroll SW, and another for a small church (one employee) using Excel. With that knowledge and experience, and having read various comments, it seems reasonable that IRD allow a threshold of employees under which a manual system may continue. Not all entities have the ability to pay online, and small charities especially are unable to both pay online and maintain their constitutional requirement to use at least two signatories in the payment process (in most cases this means a manual cheque is required - larger charities probably use an online dual authorisation process but the cost of that seems an unreasonable burden for a small charity).

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8 months ago
Peter
We run a farm and have a combination of permanent and casual staff, I do payroll monthly for full time employees and casuals as they happen. It seems odd that I enter their information into the ird website to work out their PAYE etc. then pay them and then the next month I have to redo it all to pay the PAYE. It would be great if I could enter the pay info to the myird website and do my payroll then and since it would have all the information, when my PAYE is due the myird could send out an email with how much to pay and I could pay my PAYE. I am relatively new to doing this and it seems ridiculous that all this information needs double entered which greatly increases the risk of making a mistake. It would be very simple to stream line this with the myird website.

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7 months ago
Kelvin Marks
the web site of the IRD is rubbish you should be able to enter the net wages per employee and process with one button all calculation are worked out and the total at at the to pay include all taxes acc,paye,kiwi saver, and esct plus any other taxes worked out from the tax code staff member is on their for no reconciliation at the end of year nor any accounts to pay there fore the tax should be reduced as the money to IRD as they will get 40 more payments than now

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7 months ago
Liz McCracken
I use IMS payroll & their electronic filing for the IRD is marvellous. Don't see any need to change what is available now... Must keep a paper system going for those that prefer it.

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7 months ago
Brigid
Hi there We have a casual part time cleaner. Every fortnight it takes us ages to figure out her pay because it is so difficult to find the Holiday Pay calculator etc. Would it be possible to put the Holiday Pay Calculator and the Kiwisaver etc etc all in one place?

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7 months ago
ian chamberlain
IRD Need to stop putting payment for all PAYE in date boxes and keep as a rolling account.

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7 months ago
Neddie
Biggest problem for me is the accessibility of the correct forms online. With the GST your system tells me I need to file it and when and I click on it, put in the information and job is done. With PAYE, I am constantly searching for the right form to fill in and often find I get kicked out because the system doesn't like something. PAYE is extremely confusing, yet GST works beautifully. Needs fixing.

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7 months ago
Chad Tuoo
Be great for this to link with payroll software so we don't have to input into IRD website.

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7 months ago
Di B
Could we PLEASE receive some notification when the PAYE is due? It is tempting to go back to paper ones as the paper form serves as a reminder. When doing it electronically it is so easy to forget it.

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6 months ago
Jo Lawrence
We are a small business with two employees, paying weekly on a manual payroll system. The current PAYE system works well - we use ir-online to complete/file monthly employee schedules and it takes about 2 minutes each month. The online system is pretty straightforward and have had no difficulties, albeit only two employees so amount of data is fairly minimal. The monthly PAYE system also provides a good check against the weekly journal entries for PAYE/Kiwisaver liability in our accounting software. In this regard, any keying errors are identified before submitting the returns online and so far have never had the need to make amendments to a filed schedule.

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6 months ago
Megan B
The current Monthly Schedule online filing system doesn't allow for a negative tax situation, in reality this can occur and would need to be able to be filed. Our company also has a mixture of monthly, fortnightly and weekly payrolls, these are all combined into the one EMS schedule however filing for each pay could see up to 20 pays each month to be filed.

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6 months ago
Mario Becroft
I own a small business with 4 employees and run payroll manually. I suggest: 1. Simplify the tax code. The complexity of the tax code has been found nearly always to be the single largest tax-related burden on small businesses. The fewer obscure rules and taxes that have be managed, the better (I am looking at you, Kiwisaver.) In a utopia, there would be a simple, single set of tax rates that can be easily calculated and applied by anyone proficient in arithmetic. 2. Integrate IRD's online PAYE calculater with ir-File. 3. Simplify and streamline the user interface of the PAYE calculator and ir-File tools. Now imagine this new world where there is a simple, integrated version of the PAYE calculator and ir-File. My life becomes so easy. ir-File already keeps on record my employee details including each employee's tax code, so I do not have to re-enter these into the calculator every time. Once all employees are set up in ir-File, after each pay period I simply enter each employee's wages/salary if different from the previous period, then hit 'OK.' All deducations are calculated automatically, the EMS and IR345 are filed automatically, and I am presented with the net pay for each employee, and the total deducations payable to IRD. Sure, accounting software can do some of this, but if the calculations are done by the IRD, they are guaranteed to be correct and up-to-date, and there is no need to re-enter data. Moreover, IRD is best placed to provide this service as IRD best understands its own rules. It just makes sense for IRD to provide this simple service that would make life infinitely easier for small business owners--bringing payroll down from a chore, to something that can be done in a few minutes. 4. Rather than setting up B2B automated data transfer from only specific accounting software packages, which locks users in to certain software, the IRD should provide a public REST API for submitting data as an option instead of manually entering it into the above-described system. Then anyone with a computer programming capability could easily upload data, as an alternative to manually entering it.

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6 months ago
Bruce 123
The major problem we have with the payroll system is it has been extended to cover everything, Court fines, ESCT, ACC, KiwiSaver, Student Loans, Working for families, child support etc. There is a need to return to having one tax rate per employee which includes everything. What should happen is the IRD should advise employers each month what the correct percentage to deduct is. Following this My thought is the Payroll period should be on a monthly basis, that employees who over pay should be able to receive refunds from the IRD by the end of the following month...Conversely the IRD should be able to request payment of any arrears in the following month whether by payment from the taxpayer or taken from wages.

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6 months ago
Colin Kyle
I have no objection to simplifying the tax system so long as its more in favour of the tax payer than IRD. For large employers that have a payroll package paying each time the employees get paid is easy. Statistics tell us that 85% of businesses are small, so that leads us to the problem that only some employers may use a payroll package or can even afford one. Paying on the 20th of the month has been in place for so long that small employers are used to it and can budget for that day. With the penalty regime and if employers have to pay weekly to IRD that creates more burden to file every week and pay it. With missed payments by one day, at $250 for late filing and then late paying penalty, you need to waive penalties on PAYE to reduce the burden on filing, as it could potentially cost the employer a $1000 a month. You need to consider the effect on the taxpayer more than the benefit to IRD.

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6 months ago
Christopher Keall
I generally agree that the more that can be done on line and automatically the better and I would happily link our fortnightly wages and monthly salary payments directly to IRD and make the PAYE payments at the same time rather than have to remember to file another return by the 20th of next month. I understand that IRD keeps the electronic PAYE and GST returns available to me for 2 years but expects me to print out a hard copy and retain this for 7 years. This seems ridiculous. Having gone through the process and to the effort of electronic filing IRD has got the information - surely it should then be up to IRD to keep track of it, end of story. Also, if our accounting and or payroll software is going to have to transfer data to IRD who will bear the cost of this increase in functionality of the programs - IRD who will benefit, or me the business owner. Perhaps IRD could just simplify the whole pay/accounting field and establish "best practice" programs that it provides free to businesses who use them to everyones mutual benefit.

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6 months ago
Irene Te Koeti
Leave it as is or give small businesses a choice. With only 1 employee, we don't have any payroll software and would struggle with implementing anything like this or with any other electronic requirements. We're happy with the current system of monthly PAYE and the manual forms.

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5 months ago
Susan
Monthly filing of returns is more than adequate. For a small business, we keep manual records of employees pay as can not justify expense of a payroll system. Online filing is OK once you are used to it but a few quirks of the system need improving. Finding "ir-File" seems illogical when everything else refers to PAYE deductions. Is a crazy system to have two pages of data required, purely to add one extra column of information for ESCT to the second page, and even more frustrating when that second page does not always pre-populate figures from the first page of data entered.

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5 months ago
Noel Reid
No, some aren't key for larger employers

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5 months ago
Noel Reid
No, some aren't key to large employers. Others include the substantial manual effort imposed on employers when adjusting for backdated Overpayments, and the unnecessary rejection of IRFiles (348) due to invalid edit checks by IR.

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5 months ago
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