From 1 April 2019 the IR348 will be replaced with a new employment information schedule.
The new filing rules divide employers into one three groups with different filing obligations.
The online group
This group must electronically report employment information within two working days after each payday. This will be the default group. Most employers will fall into this group.
The non-electronic group
This group will apply to smaller employers who have less than $50k of PAYE and employer’s superannuation contribution tax (ESCT) combined in the previous tax year. Employers in this group will have 10 working days to file the information in paper form.
The new employer group
New employers have 6 months in which they can apply the non-electronic group filing rules. However, it they choose to file online, the online group rules will apply.
A “payday” is the day the employer instructs the bank to make the funds available to its employees.
The rules contain some concessions to reduce the compliance costs for reporting “special payments” to employees. These include employee share benefits, schedular payments and non-regular / out-of-cycle pays (e.g. such as when an employee ceases employment or perhaps submits their timesheet late).
While mandatory from 1 April 2019, employers have been able to voluntarily apply the new rules since 1 April 2018.
While the filing requirements will change, PAYE payment dates will remain the same. Employers will also continue to file the IR345 Employer Deductions form in the usual manner. The IR345 form will likely be replaced in future as part of Inland Revenue’s broader technology upgrade.
Employers should be looking at the changes and ensuring they are on track to meet the 1 April 2019 mandatory start date. They should be reviewing their current payroll processes and considering whether these will need to change. Employers who use a payroll provider should ensure the providers will have the capability to meet the new filing requirements.