- What returns you need to complete
There are two returns you need to complete as an employer:
- Employer monthly schedule (IR348), and
- Employer deductions (IR345) form.
Most businesses file through myIR. Log in to myIR and complete your IR348 and IR345 through ir-File. Once you have filed online, all employee details will be saved and pre-populated on future IR348s.
If you have payroll software the process is even easier. You just upload and transfer a file each time you complete a return.
When your payroll returns are due depends on how often you need to file them. You'll find your due dates in your myIR account. Payment is due on the same date you need to file the IR345. Most businesses pay online when they file so the payment doesn't get missed.
- Common information that must be in your IR348
Some details your IR348 must include are:
- the IRD number and tax code for each employee
- employment start and/or finish date (if appropriate)
- gross wages paid and deductions made
- KiwiSaver employer contributions (if appropriate)
- student loan deductions (if appropriate).
From 1 April 2018 you can choose payday filing, which means you can file your information every payday. This will be compulsory from 1 April 2019 and can also be done through payroll software.
- How to correct an employee's tax code
Sometimes an employee shows the wrong tax code on their Tax code declaration (IR330).
We regularly check to make sure:
- your employees are on the right tax code, and
- the correct amount of deductions have been made.
If we identify employees using the wrong tax code, we'll write to you. We'll tell you which employees are using incorrect tax codes and which code they should be on.
If you receive a letter from us you need to:
- correct the employee's tax code, and
- deduct tax based on the new tax code.
You'll need to correct your employee's tax code for the next pay period so your employee starts paying the right amount as quickly as possible.
Find out more about correcting employee tax codes and what to do if they say they're using the right tax code.
- How to correct a contractor's tax rate
Sometimes when a contractor fills in the Tax rate notification for contractors (IR330C) they may choose a rate that is too low.
We may check your IR348 to work out if we think the rate they are using is too low. If we do we may write to you asking you to change the rate to a different amount. We'll also notify the contractor that we have asked you to change the rate.
If you receive this letter you'll need to:
- change the rate in your payroll information, eg, in your payroll software, to the one we've advised, and
- deduct tax at the new rate.
You'll need to do this from the next payment you make to the contractor.
- How to correct a return after it has been filed
To correct a return after it has been filed you can:
- send the corrections through secure mail in myIR, or
- complete an Employer schedule amendments (IR344) form and send it to us.
- PAYE intermediaries
Employers who pay less than $500,000 in PAYE and ESCT each year are eligible for a subsidy if they use a listed PAYE intermediary. The subsidy is to encourage small employers to outsource their payroll services so they can focus their efforts on growing their business.
- What if I don't file or pay on time
If you think you won't be able to file or pay by the due date, contact us as soon as possible.
If you're late with filing or paying you may be charged:
- late filing penalty
- late payment penalty
- employer monthly schedule non-payment penalty
- shortfall penalty
- non-electronic filing penalty.
- Penalties and interest
You can prevent penalties and interest from adding up by paying and filing on time.
If you don't file on time
Late filing penalty
If you don't file your IR348 by the due date we'll charge late filing penalty of $250 or more.
If you don't pay on time
Late payment penalties
If you don't pay your taxes when they're due we'll charge late payment penalties.
Initially, late payment penalties are charged in two stages:
- The day after the due date, you are charged 1% of the amount you owe.
- If you still haven't paid seven days after the due date, you are charged 4% of the amount you owe.
Then every month after the due date we charge 1% of the amount you owe as a further penalty.
If you file your IR348 but don't pay the tax, we may also charge 10% of the debt you owe as a non-payment penalty.
Every month you have deductions overdue, we'l add 10% of the amount you need to pay us to this debt.
Interest will add up
We'll also charge interest if you don't pay what you owe by the due date.