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Implementing the change for PAYE Information

How frequently should employers provide PAYE information?

Many of the benefits from the new PAYE services depend on PAYE information being provided to Inland Revenue on a payday basis. The Government needs to balance the employer’s interest in choosing how to provide PAYE information against the wider system benefits of information being provided in a disaggregated form and more quickly than at present. There are three possible approaches to implementation:

  • Voluntary-first method:  where employers could choose how to provide their PAYE information, but a timetable requiring employers to provide PAYE information at the time the business process occurs, may be introduced if justified by a review;
  • Review method:  which is like the voluntary-first method but where the date of the review would be specified at the outset;
  • Legislated approach:  under which a timetable would be legislated at the outset specifying when different classes of employers would be required to provide information when the business process occurs (for information about income and deductions this would be on a payday basis).

Questions

1.  Do you agree that Government needs to be able to balance the employer’s interest in choosing how to provide PAYE information against the wider system benefits?

2.  Which of the above implementation approaches to the provision of PAYE information at the time of the business process (voluntary-first, review or legislated) do you prefer and why?

3.  If you support the ‘review approach’ how long after it first becomes possible to meet PAYE obligations by submitting data at the time of the business process, should the review occur?

4.  Do you think Government should require employers to use payroll software capable of providing PAYE information at the time of the business process? 

5.  If your answer to any of the above questions would vary depending on an employer’s size or other characteristics, please outline the considerations you think are relevant.

6.  If you were required to provide PAYE information at the time of the business process (for example information about payments and deductions on a payday basis) would you seek to change the frequency with which you paid your staff?

 

Comments

Haydn J
It seems from the introduction and the way that the questions are phrased that you have already made up your mind on this one. 1. I disagree. The objective is to simplify the tax system, not to make my tax reporting more onerous than it already is. 2. Voluntary 3. n/a 4. no. Isn't this the same as question2? 5. no 6. No. I don't want to change my business processes just because of a change in tax requirements

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8 months ago
Software Training contractor
1. Yes, there'll always need to be a balance 2. voluntary first. That way everyone, including IRD gets a little bit of wiggle room 3. n/a 4. No. But there could be sweeteners to help make that happen 5. n/a 6. Not likely. I get paid according to different schedules at the clients I work with. Any subcontractors I might use would be paid on the same frequency with which I look at my tax obligations (monthly)

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8 months ago
Chris Fitzgerald
If an employer is using payroll software that can transmit the information each pay period without extra effort, great, but I do not want to be changing my payroll software just to make that happen. Changing from a familiar system that is integrated into other business processes creates cost and effort. With so many businesses running on existing products IRD needs to accept that's the way we do things and allow for it in the planning of policies and processes. For smaller operations running with no system, increasing the frequency of reporting is not acceptable. No doubt many of them would change to a monthly pay period and that is unfair to some employees - not just the initial disruption of changing mortgage payments and other APs but also the hardship that can occur by running out of money before the monthly pay period comes around.

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8 months ago
Joanne
As a small business owner, having to provide PAYE info at every payday would double the amount of work I have to do in regards to PAYE. I use basic software so if I had to change to new software to enable reporting to IRD this would be a significant cost to my business.

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8 months ago
Paul
The Australian system is very easy, you pay GST quarterly and pay your PAYE at the same time and on the same electronic form. How about making this an option for small business? It will significantly reduce our workload.

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8 months ago
Lyn
I do not agree that PAYE should be paid on "payday" I definitely do not think a payroll system should be connected to, or talk directly to the IRD. I think the status quo is enough - PAYE on 20th and once a month. The IRD is getting greedy for funds on a more regular basis - why is this necessary? Yes, we would consider changing our wages system if we had to pay PAYE as we go. I can see a rebellion from the employees!! Is this whole thing about raising more regular income for the Inland Revenue Department?

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8 months ago
Delwyn Shaw
4 - I don't think the government should be telling employers what systems they can and can't use for payroll

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8 months ago
michele hunt
Monthly suits our small shareholder salaried employee business and allows me to review for errors regularly. I have no idea how this would suit larger businesses.

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8 months ago
peter Warwick
No the IRD should not have to power to force electronic filing of any type on any business. It must remain optional. My experience with international companies and software providers does not give confidence in this being a wise or smooth implementation. The additional costs on SME will cause harm and stress for small business owners that will out weigh cost and time. This will only advantage the software providers and IRD. There is a very good reason may small businesses file by post, still have a paper wage book or what many may call archaic systems, it is simple and very cost effective for that business. I am Director for 2 companies and one is fully electronic and one very basic accounting software and paper bases systems. both companies are good at what they do.

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8 months ago
Ian McKee
4. I don't think companies should be forced to use payroll software. Monthly filing works fine for us. While 'clunky', the existing system is quite usable.

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8 months ago
Chris Peace
1. Yes 2. Voluntary first 3. no comment 4. Yes, but there should be some payback for the additional cost 5. No comment 6. No

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8 months ago
Bernadette
I don't think that payroll software should be mandatory, but have no issue with processing my PAYE at the time of doing wages. I currently do wages fortnightly, and may seek to make it monthly if this was introduced.

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8 months ago
Common Sense
In response to questions: 1. Yes, most definitely. 2. Voluntary because NZ is already far to over regulated by bureaucracy gone mad 3, Don't agree with any review as it will continue to waste valuable business resources and taxpayer dollars. Could be a good idea to get rid of Inland Revenue 4. No 5. N/A given other answers. 6. No and would attempt to recover the additional costs of administration through the Courts from the Government and in particular IRD

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8 months ago
Suzanne Ashton
1. Yes, the Government needs to be able to balance the employer’s interest in choosing how to provide PAYE information against the wider system benefits. 2. Neither of the above, monthly PAYE reporting is more than sufficient as it allows time for late manual pays/error corrections to go through so the figures are correct at the end of each month. 3. N/A 4. No this should be always voluntary and could have some benefit to the employer's who do this as it will require more time/checks each payroll. 5. No should be a one-size fits all solution. 6. This would be annoying as I work for several companies on different payroll cycles.

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7 months ago
Mario Becroft
Keep it simple. I pay all my employees monthly and file my EMS and IR345 monthly to minimise administrative overhead. From my perspective, any additional requirements would be unwelcome.

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6 months ago
Martin Etherington
2. Legislated Approach. Bite the bullet and just do it asap. (From April 2017). 4. As long as IR provides a PAYE calculator and a means to manually enter information into myIR to submit it, like can be done now, then it should not be compulsory for businesses to use payroll software or outsource to someone who has payroll software. On the flip side payroll software vendors will aim to show that their solutions have benefits (time saving, leave tracking, correct payments for leave, compliant record keeping, etc.) that make the cost worthwhile compared to manually using PAYE calculator and myIR. Over time, if the use of myIR for filing falls to levels where it is not worth providing the service, then it could be made compulsory to use payroll software. I estimate this is still a few years away, but filing every pay will accelerate this.

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5 months ago
Noel Reid
Can I note on my browser, the "have your say" box covers the questions.... Q1 - Yes Q2 - voluntary to start; to help ensure any "bugs" are ironed out, while IR have willing participants

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5 months ago
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