Payroll end of year: Are you ready?

PayrollThe end of the 2017 financial year is upon us and we just wanted to make sure you are aware of any upcoming changes that may affect you or your employees from 1 April:

 

PayrollThe minimum wage is increasing by 50 cents per hour to $15.75 on 1 April 2017. The starting-out and training minimum wage rate is increasing from $12.20 to $12.60 per hour.

PayrollThe annual ACC earner levy threshold is going up to $124,053. However, the Earner Levy Rate will remain at $1.39 for every $100 of liable earnings.

PayrollThe Student Loan threshold is increasing to $368 a week.

 

PayrollThere are new rates and rules for anyone employing contractors. From 1 April, any Contractor may voluntarily elect to have payments made to them considered a schedular payment and elect their own rate of withholding (no lower than 10 cents in the dollar).

If no rate is specified then a standard rate of 20 cents in the dollar will be applied. Note that the employee needs the agreement of the employer to withhold tax for the contractor.

What you need to do:

PayrollUpdate the salary and wages information for those employees on minimum wage, earning over $124,053 and/or subject to Student Loan deductions. If you are using one of the Payroll software systems and need some help to make any of these changes, please give us a call.

PayrollBefore the first pay run of the new tax year, you’ll need to review the ESCT rates, to make sure they are based on what the employee actually earned for the previous tax year and update any, where required.

PayrollIf you employ contractors who wish to have Withholding Tax deducted, you must give them an IR330A to complete. You will need to enter their Withholding Tax rate into your employee details in your payroll software to calculate the tax to be paid with your other employees PAYE.

Please note that you will need to specify this is Schedular income by entering the gross earnings in the “Schedular Payments” column of the Employer Monthly schedule, (IR 348) NOT Gross earnings.

PayrollIf you are not currently using a Payroll software system and would like to get this underway for the new year, we suggest to make contact with one of our Software Services team to evaluate and implement one of the options available to you TODAY.

 

If you wish to get in touch with our Software Services Team, please email support@ilumin.co.nz and they will be glad to help you.