Payroll 2018: ringing the changes

Last year NZBusiness reported on some of the key changes planned for New Zealand’s payroll industry in 2018/2019. Twelve months on we went to iPayroll’s Martin Gleeson for an update on how things are progressing.

The payroll landscape is an ever-changing one – and not just for business owners and those staff charged with the responsibility of ensuring employees get paid correctly and receive their individual entitlements. 

The payroll providers, including PAYE Intermediaries (PIs), are not exempt from the changes in processes and technologies either.

Inland Revenue’s transformation project is underway – and understandably, with a project of this scale and nature, the impact on New Zealand’s wider business community will be significant. 

The project introduces the concept of ‘payday reporting’ voluntarily from April this year, and compulsorily from April 2019. Once implemented payroll information is required to be sent to IR within two days for each and every payroll. So for a weekly payroll, for example, this information will be required to be sent to IR electronically four times each month. 

It’s a departure from the current twice monthly reporting for large organisations and monthly reporting for small businesses, and replaces the FIRST process system with START which, as iPayroll’s managing director Martin Gleeson explains, has more user tools for PIs and therefore expected greater efficiencies.

As Gleeson points out, while it was initially thought that organisations would have to interact with both systems during the transition period, primarily because student loans and child support elements are not specifically incorporated into START at this time, IR have subsequently confirmed that users will only need to deal with one system, with IR managing all “behind the scenes” reconciliations.

PIs, such as iPayroll, will be interacting directly with eServices or gateway (both in START) and IR will be transferring any relevant data between the two systems (START and FIRST). 

During the voluntary period for payday reporting an employer can choose to continue with the current reporting schedule of monthly, or they can choose to adopt payday reporting. 

Whichever option they choose they will be interacting with START, not FIRST. 

The current irFile system for uploading the monthly IR348 will be replaced by START eServices (myIR), while the same file format will continue to be used. Payday reporting can be uploaded through myIR or submitted through the new gateway services.

iPayroll will be adopting payroll reporting during 2018, and will progressively move its current client base of over 6,000 employers to START. This will be a seamless process for all iPayroll clients and will be fully managed by iPayroll on behalf of all clients, both existing and new.  

Coalface developments

Meanwhile, at the business coalface, there is much to keep business owners and payroll staff on their toes – but the primary relationship remains the one between business and payroll providers. 

Furthermore, payroll requirements are constantly evolving and vendors are continuously releasing new or enhanced features (and technologies) that are useful and time-saving for clients.

Employees are often the key beneficiaries of these new features – and the emphasis is usually on streamlining the whole pay process.

For example, in early 2017 iPayroll released Timelogs to its Employee Payslip Kiosks available on mobiles, tablets and computers – making it easier for staff to record their hours against time codes. 

“This has been well received by many industry groups wishing to streamline the way employees present their hours worked to their employers,” says Martin Gleeson, “particularly for hospitality, retail and trades.  

“Timelog approvers simply receive these logs and approve, adjust or decline them online as required – no paper necessary.” 

There are enhanced HR features too – including the ability to upload documents (great for employment agreements), performance reviews and certificates. An employee’s photo can also be attached to their personal details. It saves confusion when you have large numbers of employees or people with similar names, says Gleeson.

Many of the latest platform improvements are all about making life easier for employers.

iPayroll’s new Top up Allowance, for example, enables employers to pay staff correctly and meet obligations under the minimum wage requirements – thus avoiding potential conflicts with staff or penalties with MBIE and IRD. 

Gleeson says this is particularly useful in the rural sector, along with tools to calculate relevant pay for salary or wages paid to staff who work “farm” hours and inadvertently get paid less than the legal minimum wage for the hours they have actually worked. 

“Having a tool enabling employers to easily top up a person’s normal pay to a minimum wage amount, calculated on the hours they have actually worked, ensures compliance with the appropriate legislation.” 

Recognising local Anniversary Day public holidays is another feature employers appreciate. 

“We’ve always recognised national public holidays as it makes processing leave requests with public holidays easier for employers and employees alike,” explains Gleeson – adding that this feature ensures correct payment and compliance without manual intervention. 

Including local anniversary days to this suite further enhances the maintenance of payroll, leave and holidays seamlessly for employers and employees alike.

Security is another issue to consider. In 2017 iPayroll introduced two-factor authentication (2FA) – an extra security measure that protects a business’s data by adding an extra step to the regular log-in procedure. iPayroll uses the Google Authenticator app to let customers utilise the extra protection 2FA provides. 

The joy of giving

While it may come as a surprise to many, there is also a strong social aspect associated with iPayroll, which now has over 60 registered client charities featured in its unique ‘iPayroll Giving’ service. 

“This makes it easy for our clients and their employees to donate and returns the tax credit to employees at the time of the pay run,” explains Gleeson.

“iPayroll manages all administration of the service including development and ongoing maintenance, payments and tax credits, without cost to the charities themselves. Every dollar donated through our service finds its way to the relevant charities without deduction.”  

Since the service began more than $350,000 has been donated by iPayroll, its clients and employees. 

“Something we are very proud of,” says Gleeson.