Payday Filing New Zealand

Ever wondered what goes into integrating your systems with a government department. Below we outline some of the key technologies we employed to connect directly into the new Inland Revenue Department (IRD) systems in New Zealand.

The following outlines the various technologies employed to successfully connect with the IRD Digital Transformation system. Tandem NZ is well versed on what is required and how to implement a successful connection between any system and the IRD system.

PayDay Reporting Implementation

This document is intended to provide the technical details required to consume the IR gateway services such as Identity and Access/Authentication and Authorisation services, Employment services, and Return services offered by Inland Revenue Department(IRD).

Inland Revenue offers a set of external facing web services that facilitate secure and efficient business interactions between itself and its customers/service providers. IRD gateway services will allows its customers to submit and retrieve payroll obligation data electronically through this gateway.

Inland Revenue implemented the following suite of gateway services,

Identity and Access Services

Consumer Services

Identity and Access Services

Inland Revenue established a new set of Identity and Access Services that will provide its customers with authentication and authorization mechanisms for accessing IR’s new Gateway services.

End-User Authentication Mechanism

The OAuth 2.0, industry-standard protocol, the process is used to authenticate end-users using their IR user ID and password and grant 3rd party software consent to access their information.

Inland Revenue imposes its customers/service providers to implement and use OAuth 2.0 mechanism in the client application the end-user will be using.

End-User Authorisation Mechanism

IRD generates its own Authorization Token once the end-user is authenticated successfully to identify the service requested IR customers and determines whether the privileges should be granted to the requested customer to access a specific resource in IR system.

Secure Communication

The connection between the Inland Revenue and its customers is always secured strongly. The protocol set used for a secure layer is SSL/TLS, this will create an encrypted link between IR and its customers so that any interaction that takes place between these two parties will always be encrypted and secured.

The protocol used by IR to establish secured layer connection is TLS 2.0.

Following are the Mechanisms, Technologies, Protocols, and Standards used in SSL/TLS Communication,

Encryption Mechanism

RSA, 256-bit encryption is a data/file encryption technique that uses a 256-bit key to encrypt and decrypt data or files, is an algorithm used in IR SSL/TLS communication to encrypt and decrypt messages.

It is an Asymmetric Cryptographic Algorithm. Asymmetric means that there are two different keys. This is also called public key cryptography because one of them(public key) can be given to everyone/IR customers. The other key(private key) must be kept private with IR.

SSH Keys

IRD consumes the benefits facilitated by SSH keys. SSH, Secure Shell, is a cryptographic network protocol for operating network services securely over an unsecured network.

This mechanism is used in SFTP(Secure FTP) file transfers to identify the organisations sending/receiving files.

SSH keys need to be exchanged to authenticate both parties(IR and its customers).

Public Key Infrastructure(PKI)

IR Public Key Infrastructure (PKI) supports the distribution and identification of public encryption keys, enabling IR users and computers to both securely exchange data over networks such as the Internet and verify the identity of the other party.

PKI facilitates the secure electronic transfer of information for a range of network activities between IR and its customers.

Digital Certificate: X.509

IR uses X.509 digital certificate that uses the widely accepted international X.509 public key infrastructure (PKI) standard to verify that a public key belongs to the specific user, computer or service identity contained within the certificate.

An X.509 certificate contains information about the identity to which a certificate is issued and the identity that issued the certificate.

Consumer Services :

Inland Revenue has a set of services including ES(Employment Activities services) and EI(Return Filing services) that allows customers to submit and retrieve payroll obligation data electronically through the IR provided gateway services.

Technologies Used in Implementation of PayDay Reporting Application:

The Frameworks and Technologies that are used in the payday reporting application implementation as follows,

The latest version of Microsoft .NET Framework Platform

ASP .NET MVC Framework with MVVM Pattern Enabled

C# .NET, Microsoft highly recommended .NET Supported Language

SQL Server, Database

Bootstrap, CSS3, JQuery

UMBRACO, Content Management Services(CMS)

Mandrill, Email Services

PAYROLL, YOUR WAY.

In 2019 the Inland Revenue Department (IRD) of New Zealand will introduce comprehensive changes to the way all businesses need to run their payroll services. These changes are mandatory for all businesses and will fundamentally change the way you do payroll. Are you ready?

All employers need to ensure they are compliant. The new payday filingrequirements issued require that all employers will complete employee payments to the Inland Revenue (IRD) every pay run. So if you have weekly, or fortnightly pay runs you now need to submit all details to the IRD on that pay run rather than the end of the month.

To facilitate this increase in the frequency of reporting a new seamless connection between IRD and your payroll system is needed. As an employer, it is your responsibility to either upgrade or replace your payroll system by 1 April 2019 in order to comply with their new reporting obligations.

So are you ready? We have created a handy 5 point checklist for you to ensure you are ready for the changes coming.

Do you pay more than $50,000 in wages each year? If Yes you are required to comply with the new payday reporting requirements.

Do you submit to the IRD via csv file? If you answer Yes, you will no longer be able to submit electronically from 1 April 2019

Does your software automatically send the information to the IRD for you? If yes then you need to update your software to be compliant with the new IRD system as of 1 April 2019.

Do you use a third party system for your payroll? If yes contact them immediately to ensure they have a working solution in place now and are ready.

Do you pay Kiwisaver to your employees?

The Government of New Zealand has worked towards improving the administration of PAYE to benefit businesses and employers. Earlier, the employee’s income information was typically reported to Inland Revenue Department (IRD) on a monthly cadence. This monthly information, which is used by IRD to calculate the customers’ tax obligations and entitlements is often out-of-date and doesn’t accurately reflect the current financial situation.

Looking at this concern, in 2018, the Government of NZ passed legislation that will save the business time and make sure that all the information received for calculation of Customers tax and entitlement is accurate and on time.

So, It doesn’t matter which region you belong, Canterbury, Wellington, Auckland, etc,  if you are an employer in NZ and you need to be compliant with the new regulations by 1st  April.

If you’re involved in your organization’s payroll function, you must be aware of it. But, many employers still need to adapt their current payroll processes to support the new payday filing.

Since, the time is running out fast, get organized now!!

Make sure you update your payroll processes in time to avoid your business getting penalized.

This blog will help you know the in-depth information about payday filing, NZ. Topics we are covering here are–

What is a payday filing?

How does payday filing work?

What happens once I’ve opted into payday filing?

How is payday filling different?

How payday filling will Impact you?

What you should do now?

What is payday filing–

Payday Filing is a New Zealand government initiative. This initiative has changed the way businesses report to the IDR that employee payments such as wages, pay as you earn (PAYE) and other deductions have taken place.  

If you’re an employer in New Zealand and paying more than $50,000 PAYE and Employer Superannuation Contribution Tax (ESCT) per year, from 1 April 2019, you need to file electronically through payroll software or myIR

If your total PAYE/ESCT is less than $50,000, for the previous year ending on 31 March 2018 you can file using–

Online portal

by paper returns (but only from April 2019)

How does payday filing work?

Currently, the Payday filing is voluntary. There are three ways you can file online:

Direct from your payroll software

By uploading the file in myIR

On-Screen in myIR

Payroll software is easy to use. This is because it allows your payroll information, like salary, wages, PAYE or any other deductions. This information is sent to Inland Revenue at the same time as you pay your employees.

The due date for paying and submitting the IR 345 stays the same.

myIR is also another easy option. All you need to do is to open your myIR account, check the Payroll returns account in My business section and file your employment information and employee details in “My business section”.  

Remember: Once you’ve opted into payday filing during the voluntary period, you can’t move back to the monthly filing process.

What happens once I’ve opted into payday filing?

Payday filing will start at the initial days of the month after you opted in. An employer needs to file the entire employment information to IRD online within two working days of the payday.

In the first month–

You need to delegate others or reset access for others to use the Payroll returns account

You need to file the final Employer monthly schedule (IR348) for the previous month.

Once the schedule is done, file the Employment deductions (IR 345) and make the payment for that IR348 on the required due date

Then, file your employment information each payday

Later, submit any new employee details before or on their first payday.

How does the employment information file will look like?

The information you submit will appear as it is in your IR348 and you’ll include the same information you do now. However, you need to provide certain details:

ESCT (employer superannuation contribution tax) for each employee

pay period start and end dates

pay cycle, eg weekly, monthly, ad hoc

payday date

Payments

There are no changes in the mode of payment or in due dates. You have to pay monthly or twice-monthly as per the process you follow currently.  

How is payday filling different?

In the existing scenario, employers file employee earnings and PAYE information with Inland Revenue every month, regardless of how frequently they are paying their employees. But, now the payday filing is not following the same process. From 1 April 2019, this information will be reported to Inland Revenue every time your employees are paid.

The current trend of submitting an employer monthly schedule will be changed now, all you need is to submit an employment information schedule after every payday.

This entire process of collecting payroll information more regularly will help IRD offer increased certainty about employees’ tax obligations and entitlements.

How payday filling will Impact you?

All employers with $50,000 or more of PAYE and ESCT (Employer Superannuation Contribution Tax) deductions a year will need to upgrade to a payroll system that is payday filing compliant and review some of their payroll procedures.

There is an option to file online or file paper returns to those employers whose combined PAYE and ESCT deductions are less than $50,000.  If you are eligible to file paper returns, you can choose to either:

File the Employment Information Schedule within ten working days of paying staff, or

File two Employment Information Schedules — on the 15th of the month and the last day of the month.

The extent to which the payday filing changes affect your company will totally depend on whether or not your company is using the automatic payroll software to file the return.  If you are not using the payroll software now, assess it. Payroll software is a good and timely investment for your business.

What you should do now?

In total, there are approximately 50,000 employers in New Zealand. They all need to transition to payday filing within a relatively short time duration.

As payday filing will require either an upgrade or replacement of your existing payroll system, you should start reviewing your requirements now. The incorporation of payday filing is an opportunity which will help in broadening the existing business systems.

Now is a perfect time to start using payroll software if your company doesn’t have it already. Don’t wait and end up in last-minute rush, get in touch with us for the payroll integration services now.

As of 1 April 2019 the way companies have to report payroll to the IRD is significantly changing in New Zealand. All employers need to ensure they are compliant. The new payday filing requirements mean employers will need to complete employee payments to the Inland Revenue (IRD) every pay run. A new seamless connection between IRD and your payroll system is needed to handle the increased reporting frequency. This means every affected employer will need to either upgrade or replace their payroll system by 1 April 2019 in order to comply with their new reporting obligations.

Let’s Discuss Your Solutions

CSV UPLOAD TO IRD WILL NOT WORK

It is a good time to review your wider software and ask yourself if you need to update your accounting and payroll software as a whole. Do they contain all the features you need now? Are they forcing you to have time-consuming manual processes that could be automated? With Tandem NZ as your partner, you can start the review of your systems and what you need well before the deadline so you have time to consider your options before the inevitable last minute rush to be compliant with the new IRD rules. Speak to our payroll integration specialists to find out more on 0800 826 366.

WHAT DO YOU NEED TO KNOW ABOUT PAYDAY FILING?

Payday filing is changing 1 April 2019

Within the short window left until 1 April, there are about 50,000 New Zealand employers who need to transition to Payday filing. You need to start looking at your requirements now as you will need to upgrade or replace your existing system.

Let’s Talk about Payday Filing

COMPLEX AND SECURE IRD-PAYROLL INTEGRATION MADE EASY WITH TANDEM NZ

Tandem NZ worked with the Inland Revenue (IRD) team directly to develop the gateway requirements and security encryption needed for its client. All communications with the IRD needed to be fully encrypted using TLS Mutual authentication (or two way SSL as it is sometimes called). This form of encryption and data transfer is one of the most trusted systems available with both ends needing to authenticate both certificates at either end. Once authenticated the next level of security begins using authentication tokens. This means that the complexity of the security is high and requires specialist knowledge to implement.

Integrations with government departments can be time-consuming and costly exercise unless you work with the right partners who understand the technology and what is needed to be done. Tandem NZ can provide your business with this knowledge and skill. Get in touch with us to discuss your next integration work.

Our work on integrating with the IRD new platform has enabled services such as PayDay filing, Payroll reporting, GST filing etc to be automated between systems seamlessly.

As we fast approach the 1 April 2019 deadline for the impending payroll changes set by the Inland Revenue (IRD) it is becoming more important than ever that you check if your payroll software is going to be ready.

IRD recognises the impending urgency of time forever marching on and has sent an email to every employer in New Zealand about the impending compliance changes. In their email they have reiterated you need to check your software is compliant as the old way of doing things is not going to work post 1 April 2019.

Instead of filing your Employer monthly schedule (IR348) every month, you’ll need to file your employment information every payday in line with your normal payroll cycle. The New Zealand government recently passed a bill that means all employers now need to file employment information to the Inland Revenue (IRD) on a payday basis, instead of monthly. If employers make over $50,000 in PAYE/ESCT deductions a year, they will be required to file online. Payday filing is currently voluntary and becomes mandatory from April 2019.

Here at Tandem, we are one of the few software development houses in the country which have successfully fully integrated with the IRD new PayDay filing system allowing transfer of Payroll data back and forth.

Have you checked your Payroll system? Are you going to be able to comply with the new legislation requirements? It is best you check now and avoid costly issues with the Inland Revenue and possibly your staff later.

What do you need to do now?

Review your payroll processes, plan and schedule when to shift.

Ask your software provider when they’ll have the payday filing compatible software.

Opt-in through your myIR account before the month you start payday filing.

Talk to Tandem NZ about what you need and when.

Find out more