Called payday filing, the Kiwi system went live from this month and applies to all employers of New Zealand residents — including foreign businesses — and takes effect for each employer from the first pay run they make from that date.
The system, just like Single Touch Payroll in Australia, is designed to have employers submit their payroll data automatically to New Zealand’s Inland Revenue each time workers are paid.
According to the dedicated payday filing web page, the system replaces the previous Employer Monthly Schedule (IR348) form that was used to file payroll details, and applies to businesses with PAYE/ESCT of $50,000 or more.
While New Zealand’s Inland Revenue were unable to calculate the number of employers filing from Australia, the new measure is expected to impact a number Australian businesses.
Employers within New Zealand are typically required to file employment information within two days of paying staff, but according to Inland Revenue customer segment leader Richard Owen, overseas employers running shadow payrolls will be given 20 days to file.
“Employers based outside of New Zealand but who employ people resident in this country are still required to submit employment information to Inland Revenue,” Mr Own told Accountants Daily.
“However, some non-resident employers run a separate, or shadow, payroll for their employees who work in New Zealand but remain on the employer’s payroll system outside of New Zealand.
“To help employers meet their obligations, Inland Revenue allows those running shadow payrolls to file 20 days after they pay their employee. This gives employers time to collect and analyse payment information from overseas.”
Janice Aldinger, product manager payroll at Sage Software Australia — herself a New Zealander — told sister publication My Business that a “significant number” of Sage customers have employees across both countries.
“When a lot of the operations for larger organisations actually run out from Australia, so they pay employees from New Zealand here — that’s mainly what happens,” she said, noting that Sage tends to target larger businesses rather than the small business sector.
“Generally speaking, people should be using the same payroll software to do both, because from a management perspective, if you’re going to pay Australian and New Zealand employees, you need to sort of bring everything back from your organisation perspective.”
Ms Aldinger said that, regardless of the way the reporting is done, it is important for Australian-based businesses not to overlook their reporting obligations for New Zealand workers.
“Because the [payday filing] is mandatory, there was a lead-up — just like in Australia last year with STP, before the first of July last year it wasn’t compulsory, it was optional [for employers with more than 20 employees]. Well, in New Zealand, it’s actually mandatory now from the first of April for employers to do the New Zealand payday filing, which is every pay.
“If people aren’t aware of that, then that’s definitely what they’ve got to be doing now.”
Sister publication My Business has developed a comprehensive guide on the roll-out of Single Touch Payroll, which is now available to download for free.