Is your payroll services offering ready for the impact of payday filing?
If you’re providing payroll services for clients, you’ll need to be organised for payday filing well before the April 2019 deadline. Even then it will have an impact on your day-to-day operations.
Getting organised for payday filing may take time. How much time depends on the number of payroll clients you have and the software you’re using to deliver these services.
Nevertheless, payday filing is coming, it’s mandatory and there’s no way around it. Taking the time to understand what’s entailed and how it may impact your work will pay dividends, as well as giving you an opportunity to consider more efficient methods and systems.
What is payday filing?
Payday filing replaces the employer monthly schedule (EMS), which is currently filed either in myIR or through the post. Now employers will need to file their employer information (EI) return every time they complete a pay run.
And it becomes mandatory in April 2019 for all New Zealand employers.
The mandatory electronic filing threshold is reducing from $100,000 in PAYE/ESCT per year to $50,000 per year from 1 April 2019 – this is the equivalent of 8 FTE’s on the minimum wage. This means that businesses below this threshold have the choice to file electronically or via paper.
The electronic method will be the easiest and quickest way to file, and online payroll products such as MYOB’s Essentials Payroll will include this functionality.
MYOB products: fully compliant in early 2019
All MYOB payroll products (including Ace Payroll, EXO Payroll, MYOB Payroll, Essentials Payroll and IMS) will be fully compliant well ahead of the compliance deadline.
MYOB’s goal is to make compliance as easy as possible for businesses and our Partners who manage payroll on behalf of clients.
MYOB currently has groups of clients involved in the final stages of testing its new payday filing functionality on each payroll product.
How will payday filing impact my business?
In short: it’s likely to take up some of your precious time especially if you have manual, desktop or paper-based processes.
In the short term:
It’ll take time to communicate with each of your payroll clients and help them get set up, to allow you to complete payday filing on their behalf.
Each of your payroll clients will need to login to their myIR portal and update their user delegations (see below) to give you authority to complete payday filing on their behalf.
Here’s what we suggest you do well in advance of payday filing becoming mandatory:
Contact each of your payroll clients and:
- Let them know about payday filing and what it is
- Make it clear you’re well across the changes and that you’ll ensure they remain compliant
- Let them know you’ll be in touch again soon to let them know when to opt-in for payday filing
Once the feature is available in your payroll software:
Contact your payroll clients again and ask them to:
- Log into their myIR portal and opt-in for payday filing (only required before 1 April 2019)
- Amend their user delegations settings to allow you to manage their payday filing requirements with the IR*.
- Contact you (or the IR if you prefer) if they have any questions about payday filing, or need some help changing their myIR third party access settings
*If you’re using an online payroll product like MYOB Essentials Payroll, you won’t need to update the myIR delegation’s settings. You’ll be able to file electronically from within the software with the click of a button.
In the medium to longer term:
Payday filing may create extra workload for you, or the person or team you have working on payroll – especially if you’re using manual or desktop payroll products.
Think about the impact on a business with weekly pay runs (the majority of small Kiwi businesses).
Instead of filing EMS information once a month, payday filing will require the business to file every payday, effectively quadrupling the time taken to file each month.
What was a five-minute process once a month is now a five-minute process four times a month.
Maybe not such a big deal for one business managing their own payroll. But if you’re processing the payroll for five, 10 or even more of these businesses, that will quickly become a significant amount of time, potentially adding hours a month in workload.
UPDATE: Another IR change for anyone managing payroll on behalf of clients
MYOB has been lobbying the IR for some time to simplify the process for our partners who manage payroll on behalf of clients.
The government now plans to introduce a change to more formally recognise the relationships between tax intermediaries, like payroll bureaus, and their clients. If the legislation is passed, from 23 April 2019, you will be required to either formally register with the IR as a payroll bureau or set up as a nominated person to act on behalf of each of your clients to continue filing on their behalf.
This change will allow registered payroll bureaus to file for more than one client at a time.
If you have any questions, please contact the IR’s Payday Filing Account Management team at firstname.lastname@example.org. They can explain the new registration process and give you further information about the legislation.
How will reporting payday filing information work day to day?
Desktop: For MYOB’s SME desktop products such as ACE Payroll, MYOB Payroll and IMS Payroll, users will be able to easily generate and download the new EI required for payday filing. The EI file will then need to be exported and uploaded to your client’s myIR payroll account.
Online/Cloud: For the range of MYOB Essentials products, payday filing is integrated directly with the IR. This means you simply submit your EI within the software as part of the payroll process. There will be no need to upload any files through a client’s myIR account.
Get ready for payday filing today
April 2019 may seem like a while away, but it will roll round quickly.
Don’t leave it to the last minute – think about the impact payday filing will have on you and/or your team and get ready early.
To find out more about payday filing and how MYOB’s online payroll software can make it quicker and easier for you to use, speak with your Partner Manager today.