As an employer, you are responsible for keeping accurate wage, time, holiday and leave records that comply with the Employment Relations Act 2000 and the Holidays Act 2003. In particular, these requirements state that you need to be able to show that you have given all your employees minimum employment entitlements such as the minimum wage and annual holidays.
Good record-keeping is needed in order to show a clear picture of each day an employee has worked; which days were worked, how many hours, whether it was ordinary pay, time and a half, whether they were on leave, what the type of leave it was etc. All this information is used to calculate different types of pay for such as annual leave or sick leave. Employees have the right to know everything you are recording on their file and have the right to see these records.
Keeping accurate records will also serve as a reconciliation tool for you when completing your Employer Monthly Schedule IR348 and and Employer Deductions IR345 forms for the IRD, as well as assisting us as your Accountants in reconciling your payroll for year end reporting purposes.
Employing contractors also does not negate your obligations to keep accurate records. You may be required to deduct Withholding Tax for contractors and other such deductions as Child Support payments. For such purposes you must also submit these details on your IR348 and IR345 forms.
There are a variety of fully computerised payroll software solutions available – such as MYOB Essentials Payroll, Smart Payroll, Crystal Payroll, Ace Payroll etc. that can make maintaining good records easier. However, as an employer you still need to check your payroll system to make sure it is accurately recording any changes to an employee’s hours and pay.
For employees with few employees however, a manual system may be sufficient. Employment New Zealand provides a good resource for manually keeping track of payroll records for employees as per the link below:
For further advice in relation to different payroll solutions or to discuss your obligations as an employer to keep accurate records, please feel free to get in contact with your Giles & Liew Account Manager.