The Auckland-based business owner, who did not want to be named for fear of reprisals, said a job that now took him about an hour once a month would now have to be done four or five times a month.
The man has nine permanent staff, who he pays weekly.
"I just see this as another tax," he said.
An accountant has also warned the change could add up to $2000 a year in costs for small business owners.
David Harrison, a chartered accountant based in Kerikeri, said it was going to be an extra compliance burden for small businesses and could suck up a significant amount of income from their owners.
"Payday filing will not be less work. It will cost small business approximately an extra $2000 in fees a year to change to payday filing."
Harrison said that figure was based on the fact that it took about 15 to 20 minutes to calculate and enter gross wages, student allowances, KiwiSaver and child support deductions for each staff member of a company once a month.
"If this must be done four times a month instead of once, there will be an average of 45-60 minutes extra per month.
"A conservative chargeout rate of $150 an hour would see $1800-plus a year being added on to a client account," he said.
Businesses can save money by using a payroll software provider, where fees could add about $65 a month or $800 a year in costs, but would still need to take the time to enter the information into the software program.
Richard Owen, customer segment leader at Inland Revenue, said it was impossible to know how many employers would not meet the first deadline for payday filing next month. "... but we're offering all the assistance we can to help them do that."
Owen said awareness of the change was high and it should not be news to employers.
"Our focus is to help them get that first filing under their belt.
"There may be some employers who resist the change but our plan is to provide education and assistance to help them start payday filing before any consideration of penalties."
He urged any employer who did not think they would be ready by their first payday in April to get in touch with the IRD and talk through their situation.
So far, about 51,000 employers - just over a quarter of all employers - have been payday filing ahead of the April 1 switchover.
Owen said the remaining 75 per cent had been set up with payroll accounts in its online myIR system so they can get started from their first payday next month.
There are guides on the IRD's website that show employers what to do.
Why the IRD is making the change to payday filing
Owen said payday filing had been designed to align tax with an employer's payroll processes, rather than IRD's systems.
"Receiving this information more regularly gives us an almost real-time picture of an individual's tax position.
"Over time, this will help us make sure New Zealanders are paying the right amount of tax at the right time, which means people are less likely to face a tax bill at the end of the year."
On top of that, more timely access to employment information is designed to ensure that people who get the Working for Families subsidy receive the correct amount.
Automatic tax refunds and bills
From the end of the March 31, 2019 tax year, tax assessments will become automated, meaning people won't have to apply for a tax refund.
The first assessments will come out in late May.
The IRD expects about 1.65 million people will get a tax refund, of whom 440,000 will not have had recent contact with the IRD.
Another 240,000 will have tax to pay, with about 86,000 having had no recent contact from the IRD over their tax.
