It’s the final countdown

It’s the final countdown

As this magazine issue ‘hits the streets’ it’s just two months until the IRD’s Payday Filing deadline. Will businesses and payroll providers be ready? How should business owners prepare for the change? NZBusiness went to the market.

From April 1st 2019 all employers will be required to send their payroll information to Inland Revenue whenever they pay their staff. Payday filing is billed as the biggest change to the way businesses manage their payroll in more than two decades. Yet surprisingly, according to MYOB Business Monitor research, there’s little understanding of the new process amongst the New Zealand’s business community.

Get your house in order

When NZBusiness spoke to Lisa Martin, executive director of accounting solutions specialist GoFi8ure, late last year, she suspected many business owners were “in cruise mode” over payday filing – focused on just getting through the Christmas period.

Now that New Year resolutions have been made she’s hoping that “sorting out payday filing transition” is the very first business resolution business owners will honour.

“When you think about it, everything about running a business relates to people, strategy, execution and cash; payday filing is about people and cash,” says Martin. “So it deserves to be a major priority.”

Her best advice? Look at the payroll set-up you have now, and get a trusted payroll advisor – that’s your payroll company or accountant, or your book-keeper – to ensure that its fit-for-purpose.

For business owners who don’t think they’ll be ready for the transition, Martin says although Inland Revenue will offer to help, remember that at last count (in February 2018) New Zealand had 534,930 enterprises. Inland Revenue will be rather busy for a while.

“If I couldn’t successfully prepare for a marathon I would find someone who had run one and ask them what I should do. Again, it comes down to seeking a trusted advisor.”

After payday filing Martin describes payroll auditing as the “next Darth Vader of the Death Star” coming for 2019, 2020 and beyond.

In preparation for payroll auditing she advises business owners to get onto automated software. “Basically where you can log on, enter your hours, push a button and then your payroll software calculates everything for you, including annual leave, sick leave, balances, Kiwisaver, student loans and child support.

“And it only costs the price of a couple of lattés a week.”

Get your house in order now, she urges – especially everything you do from a payroll point of view. “Because it’s people’s money and PAYE, tax-deducted at source for the IRD. It has to be right and there’s an increased chance you could be audited.”

Read the rest of the article by clicking here.