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Better Administration of PAYE - Submission to IRD

Submission by Anne Bland, Client Payroll Manager, Accounted4

At Accounted4 we provide a payroll service for clients using various payroll providers that best fit our client's individual needs. I am all for reducing compliance costs for businesses but I think the Government needs to look at the complicated payroll legislation that we have in NZ first.

We have so many different types of pay calculations for annual leave, sick leave, bereavement leave, public holidays with ordinary daily pay, 52 week average, annual average and 4 weekly average under the Holidays Act 2003, not to mention the calculations for KiwiSaver with net contributions and ESCT!

Very few other countries have such complicated methods of payment in payroll. How are small business owners suppose to understand it all! The KiwiSaver 'opt out' requirements need to be changed too so an employee can opt out on start date. The time and cost involved to get the contributions/deductions back from the Government are hefty, and totally unnecessary. If a person doesn't want to be in KiwiSaver then that's it. Don't try to trick them by deducting it for a few weeks hoping that they will forget about it and end up having to stay in. Employers should not have to be in charge of an employee's financials!

Streamlining some legislative requirements first of all would reduce compliance costs for employers. Most small businesses aren't completing payrolls correctly for their employees because it is so complicated, but they often can't afford to out-source. We often pick up new clients who are despairing, their payroll is in a mess, they haven't made correct deductions, missed payments to the IRD and it takes so much time to fix everything, Then IRD staff have to spend time fixing those mistakes too.

I am all for integration with IRD and payroll software but it must remain optional so small businesses can continue under the systems that they are familiar with that work best for them. Let's get the Government addressing payroll legislation first in consultation with payroll software providers, payroll practitioners and the NZPPA - Payroll Practitioners Association for their expertise.