PAYE on Salaries & Wages
Pay As You Earn (PAYE) is the basic tax taken out of your employees' salary or wages. The amount of PAYE you deduct depends on each employee's tax code.
PAYE employees must complete a Tax code declaration (IR 330) as soon as they start working for you. If an employee fails to complete the tax code declaration, you must deduct PAYE at the no-declaration rate.
Employers must also file an employer monthly schedule with IRD detailing each worker's gross earnings and deductions. Employers with gross annual PAYE of $100,000 or more must file this schedule electronically with IRD using IRD’s IR File system.
If you are a ‘small employer’ with gross annual PAYE deductions of up to $500,000, payments are made to IRD on the 20th of the month following the deductions. The employer monthly schedule must also be filed by the 20th of that month
- If you are a ‘large employer’ with gross annual PAYE deductions over $500,000, the deductions made from payments made to employees between the:
1st and the 15th of the month are paid by the 20th of the same month.
- 16th and the end of the month are paid by the 5th of the following month (except for December payment to be made by 15 January). The employer monthly schedule must also be filed by the 5th of that month
For more information regarding PAYE or to register as an Employer either call us or visit the IRD website
Administering your payroll can be time-consuming and divert you from the core activities of your business. Payroll and employment legislation is growing increasingly complex. CooperAitken can relieve you of this burden by providing a comprehensive and confidential payroll service.
ML and ML SL are obsolete from 1 April 2013. employers should replace these with M or M SL, unless the employee has gien you a new tax code declaration (IR330).
For employees 16 years and over, increases to $13.75 per hour (was $13.50 per hour)
For new entrants and employees on the training minimum wage, increase to $11.00 per hour (was $10.80 per hour)
Children Working changes 1st April 2013
If you employ school children, you must deduct PAYE from their wages.
As a child working you must complete a tax code declaration (IR330).
Student Loans Changes 1st April 2012
From 1st April 2013 the repayment rate for student loan deductions increase from 10cents to 12 cents.
All Student Loan borrowers are required to have a student loan (SL repayment code).
There is a new IR330 Tax Code Declaration form which will need to be completed.
For exemptions and Student Loan Codes click here
KiwiSaver Tax Changes
The minimum contribution rate for employers and employees increases from 2% to 3% of gross salary or wages from the first pay period commencing on or after 1 April 2013
Government contribution to half contributing 50c for every $1 contributed by individual, to a maximum of $521.43 per year
Employers contribution to be taxed at a rate equal to the individuals marginal tax rate. From the 1st April 2012 employers contribution will no longer be exempt from ESCT (Employer Superannuation Contribution Tax).
This will not cost the employer any more. The tax amount will be deducted from their Kiwisaver contribution.
https://interact1.ird.govt.nz/forms/payecalculator/ PAYE/Kiwisaver calculator (make sure you select the correct income tax year)
Other changes 1st April 2012
ACC Earner Levy changes - this has reduced from $2.04 to $1.70 per $100 of gross earnings, see work it out calculators and PAYE deduction tables above.
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