Keep all wage records for at least seven years, including all pay sheets and PAYE deduction payment receipts. Your records must be in English. However, you can write to Inland Revenue for approval to use another language for your records.

You must keep full and accurate wage records. Cheque butts are not sufficient. You can get specially designed wage books from stationery shops.

You may find these hints useful

Complete all the wage details each payday. Show

The information in your wage book will help you fill in each IR 345 or IR 346 form, and Employer Monthly Schedule IR 348 and your end-of-year IR 68A residual claims levy statement.

Ace Payroll produces all these reports automatically.

Tax code declarations

All new employees must complete an IR 330 tax code declaration when they start working for you. A new declaration must also be completed if an employee wishes to change their tax code.

It is not necessary for your employees to complete a new declaration every year providing their tax code remains the same. Each employee needs to read the notes on the IR 330 to work out their correct tax code.

People who use a special tax code need to complete a new IR 330 declaration if their tax code changes.

You must keep the tax code declarations for a period of seven years after the last wages payment is made to the employee.

If you need extra forms you can download them from the IRD Online Library on the IRD website.

Employer monthly schedules - IR 348

Some employers who use a computer payroll system may be required to, or may choose to file their Employer Monthly Schedule electronically.

If you do not file electronically you must complete the IR 348 Inland Revenue sends you, or alternatively use the IRD approved report produced by Ace Payroll.

You must pay all the deductions you make from your employees' wages to Inland Revenue by the due date.

If the PAYE deduction due date for payment falls on a Saturday, Sunday, or public holiday, then you can make your payment on the next working day without penalty.

Example

20 June 1999 is a Sunday, so the due date for payment is Monday 21 June 1999.

Large employers pay their PAYE and other deductions to Inland Revenue twice-monthly. Small employers pay once a month. Whether you are a large or small employer depends on your gross annual PAYE deductions. Gross annual PAYE deductions are the total PAYE deductions made, including any SSCWT deductions, but excluding earner premium, student loan repayments, and child support.

Inland Revenue sends you an Employer Deductions IR 345 or IR 346 form before the due date for each payment. Fill in this form with the details for the period, and send it in with your payment.

The IRD also sends you an Employer Monthly Schedule IR 348 each month.

If your gross annual PAYE deductions are less than $100,000 you are a "small" employer. You must pay PAYE to Inland Revenue monthly. PAYE deducted in one month is due by the 20th of the following month.

If your gross annual PAYE deductions were $100,000 or more in the previous year ended 31 March, you are a "large" employer.

New employers become a large employer if their gross annual PAYE deductions go over $100,000 in the first year of employing.

Large employers must pay the deductions

Example

Period PAYE deducted		Due date
1 June 1999 to 15 June 1999		20 June 1999
16 June 1999 to 30 June 1999		5 July 1999
1 July 1999 to 15 July 1999		20 July 1999
16 July 1999 to 31 July 1999		5 August 1999

Any payments not received by the due date will be liable for a late payment penalty and interest. If you fail to account for PAYE by the due date the IRD may also charge you shortfall penalties or you could be prosecuted and fined.

New employers
If your gross annual PAYE deductions go over $100,000 at any time during the first year of employing, you must contact Inland Revenue. They will send IR 345 or IR 346 forms so you can pay twice-monthly. You will also need to register for electronic filing.

Example 1
Helen Highwater Ltd starts employing on 15 April 1999. PAYE deductions go over $100,000 on 7 October 1999.

Example 2
The due dates would be slightly different if Helen Highwater Ltd's PAYE deductions exceeded $100,000 on 21 October 1999.

* As the PAYE deductions exceeded $100,000 on 21 October 1999, the twice-monthly rules apply from that pay period. PAYE deducted in the next pay period (1 November 1999 to 15 November 1999) must be paid to Inland Revenue on the 20th of the same month.

Deciding on the payment due dates is not clear cut in some cases. In all the following situations, the due dates are

Salary and wages paid once a month on the same day each month
Deductions are paid once a month to Inland Revenue. On request, Inland Revenue is able to send only one IR 345 or IR 346 per month. The due date depends on the date of deduction.

Salary and wages paid every four weeks
Generally, deductions have to be paid to Inland Revenue once a month. However, there may be occasions when deductions are paid to Inland Revenue twice a month. This is because the payday falls on a different day each month.

Salary and wages paid every three weeks
Deductions may have to be paid to Inland Revenue once or twice a month, depending on which day in the month the payday falls.

Salary and wages paid irregularly
The due date for paying the deductions depends on the date you pay wages. Remember that if you do not pay wages in any period, you must still send in a nil IR 345 / IR 346 and IR 348.

We send you an IR 345 form before you have to make each payment. This is for you to record the deduction details and send them with your payment. If you are registered with us as a payer of SSCWT you receive an IR 346 form instead. Read these notes about the IR 345 as they also apply to the IR 346. The IR 346 has one extra box for entering the SSCWT deductions.

Fill in the details on the IR 345 and send it to Inland Revenue with your payment.

If you do not receive an IR 345 or IR 346 in time, you must still make your payment. Send a note with your payment which shows the IR 345 details as well as your name and IRD number.

SSCWT deductions - Box 6
Enter the total SSCWT deducted during the period.

The total deductions payable goes in Box 7. This includes the SSCWT in Box 6.

Once a month complete an Employer Monthly Schedule, which details your employees' gross wages and deductions.

Monthly payers file their schedule at the same time as their Employer Deductions IR 345 or IR 346 , due on the 20th of the month following the month of deduction.

Large employers (usually twice-monthly payers) file their schedule once a month on the 5th of the following month, which is the same time as the payment for the period 16th to the end of the month. The schedule includes details of wages paid and deductions made for the whole month. Large employers are required to file their schedules electronically unless they have an exemption approved by Inland Revenue.

Each month, Inland Revenue sends the schedule to employers who do not file electronically. On your first schedule you enter each employee's name, IRD number and tax code. After that, the IRD preprints this information on the schedules and you only enter details of any new employees.

If any of the preprinted information is incorrect cross it out and note the correct details on the form.

You fill in the following monthly details for each employee

Full name
Surname, then first name eg Champion, Bruce. Complete this if the employee has started working for you during the month and their name does not appear elsewhere on the schedule.

IRD number
Complete this if the employee has started working for you during the month and their details do not appear elsewhere on the schedule. Use the IRD number the employee has given you on the IR 330 Tax Code Declaration.

Tax code
Complete this if the employee has begun working for you during the month and their details do not appear elsewhere on the schedule. Use the tax code the employee has given you on the Tax Code Declaration IR 330 or the tax code shown on the Special Tax Code or deduction rate IR 23.

If an employee tells you during the month they have changed their tax code, don't forget, when completing your employer monthly schedule, cross out the old preprinted one and write the new one.

Start / finish date
If the employee has started or finished working for you during the month show the relevant start and/ or finish date. The start date is the actual date the employee starts working for you. The finish date is the earlier of the date when the employee actually stopped working for you or the date they received their final pay.

If an employee started and stopped working for you within the month, show both dates on the schedule.

After a finish date has been entered, the employee's name won't be shown again. If a future finish date is shown, the name will appear until after the finish date shown passes.

Gross earnings
Write the total gross earnings paid to each employee during the month. Include bonuses, backpay, taxable allowances, and withholding payments - except where no tax has been deducted because the employee has a certificate of exemption. Show whole dollars only.

Earnings not liable for earner premium - ACC
For each employee, write the amount of any earnings not liable for ACC earner premium. The following payments are not liable for earner premium

Lump sums taxed at lower rate
Tick the circle if a lump sum was paid and taxed at the lower rate. Lump sum payments such as annual or special bonuses, gratuities, or back pay are "extra emolument" payments and are taxed at three different rates.

PAYE / withholding tax
Write the total PAYE deducted from each employee's gross earnings for the month. Also include withholding tax deductions in this box.

Child support
Write the total child support deductions made from each employee's gross earnings for the month. You may also need to fill in the child support code.

Student loan
Write the total student loan repayment deductions made from each employee's gross earnings for the month.

Finally...
At the bottom of each page, add up each column and put the total in the boxes provided. If there is more than one page of the schedule, you can either total each page, or do one total on the last page of the schedule.

Check the preprinted contact telephone and name details, and make any necessary changes. Sign and date the schedule.

Ace Payroll prints all the above information automatically in a report approved by the IRD. Using Ace Payroll, you simply print the report, sign it, and post it.

It is important you complete the child support code on the IR 348 schedule because this tells the IRD of any differences in the amount you deduct. This is because they keep a record of the amount they expect from each employee for a month.

You find the expected deduction on the CS 503 notice. If you deduct a different amount, fill in a code on the IR 348.

Use one of the following codes

A - Payment in advance
Sometimes you may pay an employee in advance, for example when they will be on holiday on the next payday. In this case, deduct the same amount of child support as you would if you were paying the employee on the usual payday. You must include the child support with the deductions for the period when the employee was given the advance pay. Your child support will be more than usual for that period, so enter "A" as the variation code.

C - Ceased employment
If an employee stops working for you, deduct child support only from the last full pay you gave them, and from any holiday pay owed. Enter "C" as the variation code, so we can remove the employee from your records. If an employee stops then restarts working for you within the same month, do not use this variation code.

D - Previously deducted
Sometimes the full amount of child support requested from an employee's wages may not have been deducted because you previously made an advance payment. Your child support will be less than usual for that period, so enter "D" as the variation code.

O - Other
If none of the other variation codes can be used to explain why the amount of child support deducted does not equal what was expected then enter "O" as the variation code.

P - Protected earnings
If you are unable to deduct the full amount of child support requested from an employee's wages due to net protected earnings then enter "P" as the variation code.

S - Short-term absences
If an employee is off work on unpaid leave for a short period of time and you are unable to deduct any or all of the amount of child support requested then enter "S" as the variation code.

Employers whose annual PAYE deduction payments are $100,000 or more - large employers - are required to file their employer monthly schedule IR 348 electronically each month. Electronic filing is optional for other employers.

"ir-File" is the fast, convenient method of sending your employer monthly schedule to Inland Revenue through the internet. It has these benefits

There are limited exemptions available to employers who must file electronically. The main one is if you have 100 or fewer employees in the 1998/1999 income year and if there are material costs to you in meeting the electronic filing requirement. From the 1999/2000 income year the threshold will be lowered to 50 employees.

There are other circumstances which may entitle you to an exemption. To find out more about this call the IRD on 0800 377 772.

Ways to pay

There are several ways to make your payment.

More information about payments is available in the pamphlets Electronic payments to Inland Revenue (IR 87A) and Making payments to Inland Revenue (IR 87C).

Electronic payments

If you are paying your PAYE electronically, you'll need these details.

Particulars - enter your IRD number, eg:

Payee code for PAYE only

for combined payments of PAYE, child support, student loan or SSCWT.

Reference enter period ended date of the Employer deductions form in this format (not the due date)

Example
Please leave boxes blank, as shown above. If you do not enter the details in this exact format, we will not be able to process your payment. Remember, you must still file your return. Please show on the IR 345/ IR 346 that you are paying electronically.

You must show each employee's finish date on the employer monthly schedule IR 348.

Employee rehired in the same year

If an employee stops working for you, and is re-hired in the same year ended 31 March, you must get another IR 330. Also show the employee's start date on your employer monthly schedule IR 348.

Employee on transfer

If an employee transfers from one branch of a company to another and is paid by the new branch office on a separate payroll

If both branches pay wages for the pay period in which the transfer takes place, the new branch should work out the PAYE on the employee's total wages. Allow a credit for the PAYE deducted by the old branch.

Neither branch needs to enter the employee start and finish dates on the IR 348 as the employee is still with the same company.

If the employee is paid from a central or head office, that office continues deducting PAYE from the employee's earnings. The employee does not need a new IR 330.

If you have stopped paying wages permanently, let Inland Revenue know, even if your business is still going.

If you have stopped or are about to stop business altogether, let Inland Revenue know by completing a Business cessation form IR 595B. You can download a copy from the IRD Online Library on the IRD website.

You must complete the IR 348 and IR 68A. Where you have ceased business altogether your IR 68A and payment is due by the 15th of the second month after the month in which you stopped business.

Example
Errol Plane's travel agency stopped business on 18 June 1999. He sends in an IR 345 form and IR 348 schedule by 20 July 1999 and the IR 68A form by 15 August 1999. If the travel agency paid twice-monthly, the IR 345 and IR 348 are due on 5 July 1999.

Running totals are your gross earnings and PAYE deductions since 1 April.

The totals given are "as at" a certain date and may not include all PAYE payments that you have sent in, if the details from your last employer monthly schedule IR 348 were not recorded when you telephoned.

Student loan deductions and child support deductions are not included.

If you need more information or would like to query the totals, call the IRD on 0800 377 772.