A simplified PAYE process being worked on by the Government will save employers time and money, the Revenue Minister says.
A tax officials' paper on PAYE errors and adjustments is currently asking for feedback, until September 15.
As part of the transformation of systems at Inland Revenue, the Government wants to reduce compliance costs on employer's PAYE obligations, Revenue Minister Judith Collins says.
PAYE is deducted by employers from employees' salary or wages and paid to IRD on their behalf. It includes income tax and the ACC levy.
"We are aware that certain aspects of PAYE, such as correcting simple errors and sending that information to Inland Revenue, are still largely manual," Ms Collins said.
"This can impose excessive compliance costs on businesses."
If employers shift to a digital service for PAYE - such as through myIR online - errors can be fixed and changes made easily, she said, but paper-based returns will still be possible for the foreseeable future.