What is payday filing and how will it affect my business?

Small Business Guides

3 min read

Payday filing will change the way businesses report employee pay, employee taxes, and KiwiSaver contributions to Inland Revenue. We walk you through the main points.

Summary of payday filing changes

Payday filing is a new regulation for how businesses tell Inland Revenue (IRD) about their payroll activity. Under payday filing, hiring businesses:

  • must submit payroll reports after each pay run

  • can submit reports in new ways

  • may be asked to pass on more information about employees  

When you must report payroll

Small businesses used to submit their payroll records at the end of every month. Typically, this meant you filled out:

  • an employer schedule (IR348)

  • a KS1 if you made a new hire

  • maybe an employer schedule amendment (IR344) if anything changed

Now you must submit that information after each pay day. This may create more reporting if you pay your employees weekly or fortnightly.

How you submit reports

You can now submit reports direct to Inland Revenue from compatible payroll software. This will be much easier than the old ways of uploading files through ir-File, or filling out forms. In software like Xero, for example, the report will be automatically submitted whenever you process a pay run.

If you don’t have compatible software, you’ll be able to upload files manually or fill out online forms through myIR. Paper forms will only be an option for businesses paying less than $50,000 a year in PAYE and ESCT (employer superannuation contribution tax).

Providing more employee information

Businesses will now be required to tell Inland Revenue the address of new hires, and details of departing staff. And if you know the date of birth for your employees, you’ll be required to pass along that information too.

When is the payday filing deadline?

Payday filing becomes compulsory from 1 April 2019. From then on, employers are expected to submit a report to Inland Revenue after every pay run. Most businesses will be required to submit that report online (unless they pay less than $50,000 a year in salary or wages including  ECST.

The due date for tax and KiwiSaver payments remains the same. That’s the 20th of the month – or the 5th and the 20th of the month if you file twice a month.

Your options for switching to payday filing

To be ready for the switch, you’ll need to make sure you can submit compliant reports every payday. Here’s what it means:

  • If you use online payroll software, check that it can automatically file payday reports with Inland Revenue for maximum convenience.

  • If you use spreadsheets or desktop software, you’ll need to make sure your file format meets Inland Revenue’s requirements and submit your reports via myIR every payday.

  • If you use pen and paper, you can continue to file by paper if your PAYE and ESCT. deductions are less than $50,000 a year. Inland Revenue will start sending you new payday filing forms prior to 1 April 2019.

If you don’t already use an accountant or bookkeeper, this could be a good time to start. You can find one who’s familiar with online payroll software in the Xero advisor directory.

Payday filing software

Payday filing may mean you need to find a new service provider and/or move to online payroll software. While that could be a pain initially, there are upsides. Outsourcing and automation both make compliance less time-consuming. And online software allows you to record time more easily, for example, employees can clock in and out of shifts using their mobile phones.

Learn about online payroll from Xero.