On April 1 2018 the PAYE system is changing. For the first year these changes will be voluntary, then on April 1 2019 they will be mandatory.
Essentially, all employers will have the option to pay their PAYE at the same time as paying their employees.
This is made possible by the changes to payroll software which will allow employers to calculate their PAYE liability with their pay run and pay both at the same time. There would be some extra time allowed for filing and payment, depending on the size of the payroll. Above $50,000 of PAYE per annum would require filing by the second day after payday, but 7 days would be allowed for smaller payrolls.
For many small businesses, this will ease the cash flow stress of a larger monthly payment and should not noticeably increase their administration function.
Employers can opt to do this from 1 April 2018 – but must do it from 1 April 2019 so the IRD is giving a transitional year whilst employers get to grips with the new system.
There are also simplifications to the processing of new employees with the removal of the current paper forms. Instead information input to the payroll software will transmit to the IRD.
Our support team will be fully briefed on all the changes and how it affects your Xero payroll software. All payroll software providers will be, no doubt, providing their own support for the changes.
Please contact us on firstname.lastname@example.org for any assistance.