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New Zealand Tweaks Payroll Tax Reporting Reforms

Wednesday, March 15, 2017

New Zealand's Minister of Revenue, Judith Collins, has said legislation will be presented shortly to legislate for changes to employee tax reporting, with changes adopted that were suggested during the consultation process.

The Government is proposing that from April 1, 2019, a requirement will be introduced for an employer monthly schedule with "payday" reporting of employee information. Under the reforms, employers using payroll software, payroll intermediaries, and those above the electronic filing threshold will report their PAYE information within two days of payday, and those below threshold and not using software will have seven days to report.

Under the proposals the threshold for mandatory electronic filing of Pay As You Earn (PAYE) information would be reduced from NZD100,000 (USD69,165) to NZD50,000 a year.

In light of responses to the consultation, the Government has decided not to introduce a payment obligation on the same day as payments are made to employees.

In line with the more widespread use of electronic services, the Government has also decided to end the current payroll subsidy from April 1, 2018. The Government rejected a recommendation that the subsidy be extended and that payroll software should be provided free of charge, Collins said.

Employers will not be required to use payroll software. But the legislation will require all employers to file information relating to each payday. Employers not using software will be able to file their PAYE information through Inland Revenue's website and an updated version of myIR, Collins explained.