18 Nov Shake, Rattle & Payroll
Well it’s certainly been a dramatic week. A 7.8 earthquake is quite a thing! The floods that followed didn’t help. We really feel for all those people whose homes and businesses have been seriously affected.
Fortunately our FlexiTime support team is well set up for remote working – hopefully all of our customers had a seamless support experience over the period. It’s great the way technology allows us to move our office with us.
On the topic of shake ups, the IRD recently announced some substantial changes to how PAYE is handled, as part of their Business Transformation project. The main change is that instead of filing employee schedules on a monthly basis, these will need to be filed with every pay (this will be optional from April 2018 and compulsory from 2019). Fortunately, to facilitate this extra reporting the IRD will be providing gateways to their system so that your payroll software can do these filings automatically.
At the same time they will be making additional employee details available to your payroll software. That means that when you add a new employee, FlexiTime will be able to check their IRD number, tax code and other deductions. Hopefully that will make life easier for employers.
While we fully support these changes, I’m sceptical as to how much impact they will have on reducing SME compliance costs. We already provide a PAYE service where we do the filing for employers, however many customers are perfectly happy to do this filing themselves since it is so easy to do. Additionally, the IRD is removing the intermediary subsidy which will likely make payroll more expensive for companies using bureau services.
If the Government was serious about reducing payroll compliance costs for SMEs, it would focus its efforts on the Holidays Act. As an indication of the compliance costs of PAYE and deductions versus holidays, I have pulled together some statistics on where the FlexiTime phone support time is spent. 33% of our phone support time is spent dealing with holidays and leave issues, while just 7% is spent dealing with PAYE and deductions questions. The average support call related to holidays is about two and a half times longer than PAYE help!
Let’s hope we see some shake ups in that area sometime soon, and less in the geological sphere.