Good luck getting the systems working properly.  In my experience (and I worked for the IRD and interviewed employers about such things) there is little need for this.  I have no idea where they got the notion that employers are concerned about knowing their employees tax obligation information - this never came up.  Anoyone have other experiences?

Its fantastic - I use an online payroll system now and this company now files all our EMS each month.  Cost is minimal and so savings in time and not having to purchase payroll software is great!.  I have authorised letter from IRD confirming that this Company is now responsible for our filing and paying.  Huge time saving.

I use a Payroll System that manages our payroll and I think it is really great because they file all the reports to IRD that they require without me having to worry about it each month.  We are only a small company but it is one job I don't have to worry about.  The cost per month for this service is very minimal and I don't have to worry about holiday pay workings etc.

I guess this is just a tweak to the current payroll systems used by businesses. However, I find the current IRD ir-File system clunky and hard to use compared with other secure online websites (such as SOME banks websites). I hope IRD check out the competition and strive to be in the top layer for ease-of-use.

As an employer of workers on a kiwifruit (KF) orchard I would have to say that the whole system of employee tax has become quite painful.   Initially I could get in companies to do thinning etc and like any other company they would sort out their own tax.   With some changes a few years ago WT (Withholding Tax) was brought in to this sphere of operation to cause companies to be taxed WT by the orchard owner.   This now means I have a montly load of crap to sort out for the IRD and they seem to want this information back very quickly.   The painful aspect I see with this whole WT system is that the requirements for when it should apply are bizarre to fathom out. 

Take as an example the IRD web site...

Company A provides services under a contract which involves a high capital outlay (ie large use of machinery). As this contract is deemed to have a high capital outlay and low labour input, payments made to Company A in this circumstance will not have tax on schedular payments deducted. However, if the use of the machinery was incidental, with the supply of labour making up most of the contract, then payments made to Company A for this contract would have tax on schedular payments deducted.

If you then look the recommended list of WT type payments from the back of the IR330 which is supposed to summarize the WT payments under Schedule 4 of the Income Tax Act 2007.   On this list there is nothing about horticultural activities where a large capital investment has been made.   Indeed the closest match would be...

Agricultural contracts for maintenance, development, or other work on farming or agricultural land - rate 15c if IRD number supplied or 30c otherwise in the dollar.

For a bobcat operator performing contracted work on agricultural land is he exempt or not fro WT (schedular payments)?

Where this is heading is that the intrepretation of rules generated by IRD are so loose at times that not even IRD can consistently respond with the same answer.   This does not make the job of payroll, which I never wanted to be involved in in the first place, very easy.   Rest assured that if you do get it wrong there will be at least 5 penalties waiting to be charged !

An excellent example of this is where WT needs to be taken out (now called schedular payments which is even more difficult to understand what it means). I have been in touch with IRD on several occassions for the answer where a person/company, falling under the category of needing schedular payments deducted, has a special tax deduction certificate.   The IR330 indicates that the STC tax code should be used but elsewhere on the website the following is stated...

The tax code to use is "WT" even if they have a certificate of exemption or a special tax rate.

Again while IRD cannot figure this one out themselves Im sure another set of penalties apply when they figure out their own intrepretation of their own legislation is.

Before getting into computer software some basics need to be addressed to make payments by an employeer easier...

Geoffrey.

we have a small business with 1 employee. I have a basic accounting cashflow programme and don't want to have to upgrade and spend lots of money changing my system to comply with IRDs wish to make all tax business done online. It has already cost us thousands to get a reliable broadband service because dial up was so slow I couldnt do any online form filling. Will IRD be subsidising those who don't have internet access because of the antiquated telecominications system?

We are a Trust with 1 to 3 employees.  As long as your system is simple to use and would integrate with our computer cash book it would be great  if it would do away with keeping a separate payroll.  However we need to pay manually as two signatures are required for any payment.