New Zealand Inland Revenue Implements Paid Parental Leave with SAP Software

Wellington, New ZealandThe New Zealand Inland Revenue Department (IRD) has chosen SAP’s Payroll system as the core module to drive the Paid Parental Leave (PPL) system that went live in July.

Paid Parental Leave is a government funded entitlement that pays qualified parents up to $325 per week for 12 weeks of actual parental leave. The scheme aims to compensate working parents for loss of income during the maternity or paternity leave period.

“We were given a very tight deadline to implement an entirely new system. We decided to use SAP because we needed a reliable solution that is quick to implement and can be easily integrated with our existing system,” said Bryre Patchell, National Manager BusinessDirect at New Zealand IRD.

The NZ IRD IT team worked with Deloitte Consulting to design, develop and implement the new system in six months.

“We could not develop the system from scratch because the 6 month delivery date did not allow the necessary time. Given that SAP was already the backbone of our financial systems within IRD, it was a logical step to enable its payroll capabilities to accommodate the requirements of Paid Parental Leave,” said Patchell.

The SAP Payroll system provided a seamless integration between existing and newly developed applications at IRD. It contributed to IRD’s ability to meet the tight deadline set by the NZ government for the high profile and high priority project. “This is the first scheme of its kind that aims to help working parents with a stream of income at a critical time for the family,” said Patchell.

The Department of Labour is responsible for the scheme and contracted the NZ IRD to implement the application and payment function of the scheme, which is expected to attract around 20,000 recipients each year.

“Our ability to enable the payroll capabilities of SAP proved an ideal solution in what could have been a complex system integration process,” said Patchell.

The new system has three major components including business processes, the existing tax administration system and the HR/Payroll functionality.

Deloitte Consulting was already contracted as the development and maintenance partner for SAP within IRD and so was naturally contracted to enable the payroll component for the PPL system. The team worked under a tight deadline and faced complex issues due to the tax component of the scheme and the need to fully integrate its resources in to the wider IRD-run project team.

“This is a good example of the ease of integration capability of any SAP solution. This also shows the openness as well as scalability of SAP software,” Viv Gurrey, Managing Director SAP New Zealand.

The IRD is an existing user of SAP software for its back office system including Financials.

The IRD said it had already received about 2,000 applications for the paid parental leave benefit that will entitle parents to up to $325 per week for 12 weeks. It estimates that 20,000 NZ families would be eligible for the benefit.