What you need to know

Over the next few years, all EMS (Employer Monthly Schedule) will be replaced by payday reporting. This means that New Zealand employers will need to ensure they are compliant on or before 1 April 2019 by upgrading or replacing their current payroll system. This is, however, subject to legislation.

Under these proposed changes, the PAYE information-filing process will be integrated into the payroll software that many employers use to pay employees. Employers would then file their PAYE information each payday directly from payroll software.

Why are these changes being made?

It’s about making tax simpler. Payday Reporting means employers will no longer need to file their EMS, and new employees can complete an easy-to-understand online form which meets the requirements for both the tax code declaration IR 330 and KiwiSaver deduction KS2.

Having this single online form removes unnecessary information repetitions and provides a single source of employee information – details such as a person’s name or IRD number will not be repeated.

How will this affect you?

Employers with $50,000 or more of PAYE and ESCT deductions a year have the option to file their PAYE information each payday from 1 April 2018 and will be required to do so from 1 April 2019.

Employers with more than $500,000 a year of PAYE and ESCT deductions will continue to pay their PAYE and other deductions twice a month, by the 5th and 20th. All other employers will continue to pay their PAYE and other deductions by the 20th of the following month.

 

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