What is Payday Filing and Why You Need to Do It – all the FAQs
If you are a new business owner, you may only just now be hearing about payday filing – mostly from people complaining about having to do it! We are sure you have a million burning questions, so we created this blog to answer all the FAQs about payday filing, including what exactly it means, My IRD payday filing, and why payday filing is so important.
What is PayDay Filing?
Payday filing is a compulsory process of submitting your PAYE returns after each pay cycle to the IRD. Whether you pay your employees weekly, fortnightly, or monthly, you are required to complete payday filing each time you pay your staff.
When Did Payday Filing Start?
The ability to complete payday filing has been around since the start of April 2018. However, payday filing only came in as a legally mandated requirement from 1 April 2019. So, it has been around for about three years at this point. Before that, PAYE filing was done once a month or twice for large employers. This meant that employers had to keep track of PAYE for the month and submit it in a separate process.
What Must Be Submitted?
The report you send with your employee payroll information to IRD needs to include the following for every staff member:
· Their full name, tax code, and IRD number
· Their gross earnings
· PAYE amount (including the tax on any schedular payments)
· Deductions such as KiwiSaver, student loan, and child support
· Your KiwiSaver employer contributions
· ESCT (employer superannuation contribution tax)
· Payday date, pay period and pay cycle
· The beginning and end dates of their employment if they start or cease working for you during that period
Benefits of Payday Filing
While it might seem like a hassle, payday filing benefits you as the employer, not just IRD. It allows you to enjoy the luxury of filing returns automatically, using your payroll software.
Additionally, it is no longer an extra task you have to remember to keep track of and complete each month. It is just a normal part of the pay cycle, not a separate process.
Why Was Payday Filing Introduced?
Payday filing was introduced to ensure that IRD always has the latest information to work out entitlements and taxes. This helps them to do so more accurately, offering the assurance that individuals and companies are both receiving and paying the correct amounts during the year.
When Does PAYE Need to be Filed by?
You have two days after paying your staff to electronically file your PAYE returns. However, if you are using software like PayHero, this will happen automatically. Therefore, you will not need to worry about logging in and processing it manually – it will be done automatically in plenty of time, so you do not even need to think about it!
If you prefer to file on paper-based forms, you will get up to 10 working days to do this. Most employers do not select this option, as it is time-consuming and creates unnecessary paperwork.
What if Not All My Employees Get Paid on the Same Cycle?
Some employers choose to pay certain staff monthly and others fortnightly. In a case like this, the rule of filing within two days after payment remains the same. So, for the ones you pay fortnightly, you will do payday filing for them fortnightly. For the staff you pay monthly, you will complete payday filing monthly.
Can Core Payroll Take Care of Payday Filing for Me?
Making payroll easier for employers is at the heart of what we do – so, yes, we will take care of payday filing for you. If you choose Core Payroll as your payroll provider, we will complete and automate your payday filing processes every single pay cycle.
If you are feeling overwhelmed by running the pay yourself, we’re here to help. When you sign up with us, you will get a dedicated Payroll Consultant who will be your contact and advisor for any questions you may have about payroll, including payday filing.
We work with only the best payroll software providers, such as PayHero, to provide you with efficient and simple payroll systems. Contact us today to find out more.