1 April 2017 brings some important changes for taxpayers. Most of the changes are business friendly and are designed to reduce compliance costs.
New Minimum Wage Rates
- The adult minimum wage rate will increase from $15.25 to $15.75 (before tax) an hour.
- The starting-out wage and training minimum wage will also increase from $12.20 to $12.60 (before tax) an hour.
PLEASE NOTE, WE WILL CHANGE THE RATE FOR ANY EMPLOYEES CONCERNED FOR THOSE OF YOU WE PROCESS PAYROLL FOR.
From 1 April 2017, contractors, with their payer’s agreement, 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 for residents or 15 cents in the dollar for non-residents or those on temporary work visas). If no rate is specified then a standard rate of 20 cents in the dollar will be applied. Contractors earnings under this arrangement will be reported on the Employer Monthly Schedule and tax withheld must be paid at the same time as other PAYE payment obligations. Inland Revenue will be issuing a new tax form (IR330a) to record this agreement.
Payments to contractors (including to companies) hired by labour-hire firms under a labour-hire arrangement will also be considered schedular payments. Labour hire firms must withhold from payments made at a rate of 20 cents in the dollar and like voluntary schedular payments, contractors earnings must be reported in the Employer Monthly Schedule and tax withheld paid with other PAYE payment obligations.
Independent contractors wishing to have tax withheld at a voluntary rate will need to provide you with a completed IR330a and need to be set up with a tax code of ‘WT’ with the appropriate rate of deduction.
ACC Earner Levy Rate
The Earner Levy Rate for the 2018 tax year will remain at $1.39 for every $100 of liable earnings.
ACC Earner Levy Maximum Liable Earnings
The maximum liable earnings for the ACC Earner levy will increase from $122,063 to $124,053 for all pay periods ending on or after the 1st of April. Any income above $124,053 will not be subject to the ACC Earner Levy.
The annual Student Loan repayment threshold has increased to $19,136. This is the level above which Student Loan deductions will be taken. The student loan deduction rate remains at 12%. The repayment threshold is broken down into a pay period amount as follows:
If you’re paid… Your repayment threshold is…
If you have any queries around payroll feel free to contact our office. If the thought of keeping up with payroll legislation, or are just worried about paying your staff correctly, feel free to discuss our payroll options.