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Implementing the change for PAYE Information

Should the government assist small and medium employers?

Software which will enable SMEs to submit PAYE information to Inland Revenue is expected to be widely available and relatively inexpensive. However, some employers may still face a cost barrier to its adoption.

At present, a payroll subsidy of $2 per employee per pay period, for up to five employees, is available to employers with annual PAYE deductions of less than $500,000, provided the employer uses a listed payroll intermediary.  This subsidy is paid to the intermediary.  At least one payroll intermediary uses this subsidy to provide a free service.

Question

1. Do you think that financial assistance, such as the existing payroll subsidy or something else, should be available to assist employers take advantage of the new digital services proposed to modernise PAYE information?

2. If so what factors should any such assistance target?

Comments

David Williamson
As an accountant I looked at this financial assistance and decided the compliance costs in enrolling was not worth the effort. I just charge the clients for the time.

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8 months ago
Software training contractor
1. Sounds great. A carrot to incentivise employers to do something sensible is always welcome. 2. I think previous "paper-based" employers and those with older stand-alone systems would be a natural target for assistance.

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8 months ago
Joanne
I have two employees on PAYE. An $8 subsidy per month is not going to pay any intermediary to process my PAYE. Nor would it cover the cost of changing my accounting software just to allow reporting to IRD.

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8 months ago
Georgia
I like the idea, but the main thing I want to know is will all accounting software be compatible? Or just one particular brand?

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8 months ago
Lyn
No

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8 months ago
Nadine Banfield
Once again too small to warrant any type of accounting/payroll software re-guardless of the carrot involved!

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8 months ago
michele hunt
I do not need or want a payroll system for just the two of us - husband and wife with shared accounts. Stick with my IR - it is easy and works. Also problems with Mac not being compatible with systems, I can't save files from MY IR - it just comes out as rubbish format which IR doesn't seem to understand so these sort of issues need to be sorted before anything else! I certainly don't want to be buying computers just for work related issues.

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8 months ago
Tui
Small to medium businesses should have assistance from the government. Any changes made to the tax system should fall on IRD and the government. For an example, a new staff member starts. It's up to the employer to provide all the necessary information and equipment related to that job discription. Your the boss IRD. If you want certain systems in place, then it's up to IRD to provide and equip the new system. Our tax system is suffocating small business!

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8 months ago
Jill Sisson
I am a very happy user of Thankyou Payroll's free service for 1-2 very part time employees. I don't have to spend any time at all on payroll so Thankyou are welcome to the use of our PAYE funds to make that hassle disappear.

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8 months ago
Ian McKee
1. I didn't know that existed. Where is it advertised ? Even though this is good, it does seem to create cost to taxpayers to provide income for an intermediary which isn't currently necessary in our business. If forced to go this way I would only support change if the payroll system supplied was free to my business.

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8 months ago
Jim D
Basically businesses are used as unpaid tax collectors for the Govt. I would suggest that the tables are turned and a monthly allowance is made to compensate fro the cost of administration; you may find that this would lead to an increase in employment. I refuse to hire and use contractors simply because of the extremely high cost put on me by over complicated IRD process and speak.

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8 months ago
Chris Peace
1. Yes, but available direct. For example, PAYE + Kiwisaver = $1500 but automatic reduction of 1% for electronic filing 2. Don't know

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8 months ago
lindsay mccormack
it would be easier if the govt supplied the software for paye and gst purposes then everything is linked to ird and any mistakes can be seen further more why doesn't the government have professional assistance for small businesses when they are struggling the most serious problem for small businesses is the gst component. there are quite a few businesses in hardship.

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8 months ago
Bernadette
Sounds sensible... there are a number of people who are quite content with their paper based systems and have no desire or need to change. If IRD needs them to change, IRD should cover the cost for them.

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8 months ago
Suzanne Ashton
1. The existing payroll subsidy seems to work well.

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7 months ago
Financial Adviser
Pay a decent subsidy direct to the business so that they can implement the change to increased efficiency.

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7 months ago
Mario Becroft
I was not aware of this subsidy. Let's not throw it away, but in my opinion, many small businesses would not require a subsidy if the process of using the PAYE calculator and ir-File was streamlined, making it trivially easy to enter, calculate and file the payroll online directly via IRD's web site. IRD is clearly the most well-placed to provide this service via the web as they set the rules and ultimately IRD is where the data needs to end up. There is no need for intermediaries to be involved, but this can still remain an option.

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6 months ago
Simon Mahony
I am the sole employee of my company. I don't need payroll software and wouldn't use it if I had a choice. I certainly don't need the cost of it. Suggesting that $2 a month per employee would help cover costs is just a joke (especially when it's capped at 5 employees or $10). It would cost more that that (in lost earnings) just to apply for it. I'd rather keep MyIR as long as it's made a bit smarter (in terms of how many times you have to enter the same data to file a PAYE return).

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6 months ago
Martin Etherington
I'm happy with the current PAYE intermediary incentives for those willing to outsource their PAYE obligations. The idea was the cost to government would be less than the cost of sorting out the numerous PAYE filing issues small businesses were/are getting themselves in. Was this goal achieved? Payroll software is available (without the subsidy) for as little as $15.00 per month for 5 employees. Insignificant compared to the cost of hiring employees. And easily $15 worth of time would be saved compared to manually processing and filing. Once filing and paying PAYE moves to a per pay day basis and direct from payroll software, the need for intermediaries may diminish. I suggest leaving the subsidy in place and review it a couple of years after the new system has bedded in to see how what effect it has on the need for intermediaries.

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5 months ago
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