Changes to New Zealand’s Payroll Reporting System

With the growing integration between Reckon, MYOB, and XERO comes changes to the way Inland Revenue Department (IRD) will be processing data in the future. Payday Filing is one significant change which impacts on employers and the way they file their employer reports.


What is Payday Filing?

It is an electronic payroll reporting system. Currently, employers file PAYE information and employee earnings to Inland Revenue on monthly basis, regardless of how frequently they pay their employees. Payday Filing is optional at the moment but it will become mandatory from 1 April 2019. You will still be making your PAYE payments the same way you do now to the IRD, but there will be a change of when you file the paperwork with them.


What Are the Changes?

The New Zealand Government has passed a bill to make Payday Filing mandatory from 1 April 2019. As mentioned above, employers currently report PAYE information about their employees each month no matter how frequently they pay their staff. With the new changes, Inland Revenue requires employers to send payroll information at each payday, rather than on monthly basis. Complying to this change is mandatory under the Employer Monthly Schedule (IR348). For example, if you pay your employees on weekly basis, then you will need to report PAYE information four times a month.


The change will be applied and become mandatory on 1 April 2019. However, you can choose this method of Payday Filing before that. You will need to contact Inland Revenue directly if you want to start Payday Filing earlier.


Why Are They Making the Change?

Inland Revenue’s processes and systems are being redeveloped to take advantage of modern digital technology. With these changes, the information will be received timely allowing IRD to work out entitlements and tax fast and accurately. As a result, it will provide more confidence to employers that they are paying the correct amounts throughout the year. Filing will become fully automated and a part of your normal payroll process, so you won’t need to remember to send returns in at the end of each month.


How Might This Affect You?

Employers with $50,000 or more of PAYE deductions a year are required to conform to these changes sometime between 1 April 2018 (voluntary opt-in date) and 1 April 2019 (mandatory compliance date). This means as an employer, you will need to upgrade to a Payday Reporting compliant payroll system. Furthermore, you will also need to review some of your payroll procedures.


The extent to which the Payday Filing changes might affect you depends on the size of your company and whether or not you use a payroll software. If you are not running a computerized payroll system, then it is recommended that you look to do so preferably earlier than 1 April 2019 so you get used to electronic filing. On the other hand, if you already have a computerized payroll system, then it is recommended that you make sure it is compliant.

What to Consider When Employing Someone for the First Time

Employing and keeping the right people for your business can play a major role in achieving success. Hiring employees can be time-consuming and expensive, but it is very important that you do it right if you want to grow your business. If you get it right, then your staff can become your most valuable asset.

Following are some steps you should follow in order to make sure that you comply with New Zealand employment law during and after the hiring process.

1. Create a Clear Job Description

Make sure you are clear about the kind of person you want to hire, the amount you are willing to pay, and the skills they require. Keep an accurate record of each candidate throughout the hiring process, this includes their weaknesses, strengths, expectations, as well as interview notes. This information will be useful during the candidate selection process.

2. Employment Type

It’s important to consider which employment type you need. Each type of employment can mean different set of responsibilities for the employee.

Depending on certain requirements, you might consider employing a:

  • Permanent employee
  • Temporary employee
  • Causal employee
  • Apprentice or trainee
  • Contractor

3. Determine Who is Doing the Recruiting

There are many tasks involved in the recruitment process. These include:

  • Writing the job description
  • Advertising the job (both offline and online)
  • Communicating with potential candidates
  • Answering questions about your business and the job
  • Interviewing and evaluating applicants
  • Communicating with candidates that didn’t get the job

The recruitment process can take a lot of time which you may not have. So, it might be a good idea to outsource the recruiting job to someone in your team.

4. The Recruitment Process

Following are some steps to follow if you manage the recruitment process yourself:

  • Advertising the job
  • Evaluating the applications
  • Conducting interviews and reference checking
  • Selecting the best candidate

5. Make Sure Each Employee Has an IRD Number

Every employee you hire must have an Inland Revenue number. Also known as an IRD number, this number is used by Inland Revenue to identify and categorize employees for tax purposes. You also need an IRD number as an employer. Anyone can apply for this online.

6. Hiring People from Overseas

If you are considering to hire workers from overseas, then you must make sure they have the correct type of visa and they are allowed to work in New Zealand.

Overseas workers may include:

  • Refugees
  • People on a working holiday
  • International students
  • Workers with trade or professional qualifications

7. Sign the Employment Agreement

Once you have selected the best candidates, it is time to give them a written employment agreement that is specific to the type of the employees. It should include all the agreed conditions. Make sure that the employees have signed the agreement before they start working.

8. Help Your Employees Get Started

Your new employees may not understand everything unless you help them out. Apart from providing all the job-related information your new employees need to learn, you should also make sure they know their pay and tax details are accurate. Talk to your tax agent, accountant, or Inland Revenue to make sure you understand your obligations and get everything right.

9. Understand the Rights of Your Employees

Your new employees should make your life easier. But it is normal for the workload to increase when they first begin. This is because they are still coming up-to-speed with everything. During that time, you must not forget about the rights of your employees.

New Zealand law sets out minimum entitlements and rights for all employees, whether it is included in their employment agreement or not. Make sure your employment agreement doesn’t provide for less than the minimum rights.

Following are the basic rights for your employees:

  • Minimum pay
  • Paid time off
  • Setting an employee’s minimum rights
  • Sick leave
  • Public holidays
  • Bereavement leave
  • Making sure they are not unfairly discriminated against
  • An employee’s right to refuse to do work due to safety reasons

10. Be Clear About Your Company’s Goals and Expectations

Whether you have hired one new employee or many, it is important that you define and agree on what is expected of them from their first day. You should be clear about this during the interview process.

Final Word

Your employees are your firm’s most valuable asset. Good people are hard to find and hiring can be expensive and time consuming. Whether you are hiring one employee or many, it is important to follow the above-mentioned steps. If you get it right, then you will ensure that you hire the right people.


As always, Spinach care about the health and success of your business. If you need to discuss financing for your business, do call us on 0800 SPINACH or 0800 774622 and one of our lending specialists will be glad to help.

The Importance of Hiring a Great Accountant

Many business owners, particularly those who manage small businesses, ignore to see the importance of hiring an accountant. They only realize their importance in the following situations:

  • Renewal of business permits and licenses
  • Filing of audited financial statements and income tax returns, and
  • Government agencies audit

Oftentimes, they hire an accountant when its already too late. Hiring a great accountant has many benefits. Small business owners usually find it costly to maintain a retainer to do the tax preparation and bookkeeping for their business. But what they don’t usually know is that there are many monetary as well as non-monetary advantages of maintaining one. This article reviews the importance of hiring a great accountant in business, no matter how small it is. Following are some of the key benefits of hiring an accountant:

Organized Record of Financial Data

Most business owners want to focus their energy and time operating and growing their business. As such, often times their personal and business financial documents are mixed up. Having unorganized financial documents creates headaches and stress to business owners as they don’t know if they are profiting or losing. This is where the help of an accountant proves to be invaluable. A great accountant can help you maintain an organized record of filing of your business’ day to day financial records. This is generally known as bookkeeping. When the business has an organized and systemized record keeping of transactions, it saves the business owners time worrying about whether they are profiting or losing. Furthermore, they don’t have to worry about how to organize all the receipts they need to file and record.

Financial Analysis

A business accountant analyzes the input and output of the business, including operation costs, revenue, and invested capital and then comes up with executable strategies to make sure that the business remains profitable. He/she also advises proprietors on the business’ feasibility as well as further trends.


An accountant prepares financial reports for the business within the required time. They complete accurate financial reports. These reports play an important role in decision making about the business’ various operations. Apart from this, the reports also serve an interactive purpose for internal as well as external audits.

Supervisory and Managerial Role

The role of accountants in every business is extremely important as they utilize their knowledge, skills, and expertise to keep the organization staffed by working on mechanisms of suitable hiring and management of staff. On the monitoring and supervisory aspect, accountants come up with systems capable of monitoring inputs as well as financial reports handling in the business.

Businesses that hire the services of a great accountant generally enjoy the following benefits:

  • Well-kept and organized information.
  • Rapid growth due to enhanced financial credibility, management, and strategies.
  • A lot of free time to invest further.
  • No disputes with employees as payments and terms are duly served.

Save Time to Focus on Business Growth

It can be quite time consuming to keep track of your business financial data, recording, as well as filling it, particularly if you are not used to it. With the help of an accountant, you can save a lot of your time to focus on the growth of your business rather than worrying about keeping an organized accounting record and tax deadlines.

Save Money

The possibility of future penalties is high if you don’t have an accountant. There is also the risk of interest on government reports that are incorrectly filed. With the help of an experienced accountant, you can save cost on these future charges and penalties of correcting your tax returns and accounting books on time.

Peace of Mind

The last but not least benefit of hiring a great accountant is that you will have peace of mind.  When you have a skilled accountant who efficiently does the tax compliance and record keeping, you don’t need to worry about someone coming to your business to do Audit. With the help of an accountant, you can be confident that you have the records to show that you are complying with all of the accounting and government reportorial requirements.

Final Word

Accounting is a very important aspect of any business, no matter whether it is a small business or a large enterprise. As a business owner, your top priority is to keep your accounting in proper order. If you have trouble maintaining the accounts yourself, then it is highly recommended that you hire an account to handle the accounting aspects of your business. Not only will this give you peace of mind, but you will also have more time to perform other tasks to run your business efficiently.