Payroll in the land of the Long White Cloud

Transcription

1 Payroll in the land of the Long White Cloud Chris Mar, Philip Sullivan & Brydon Tweedie (IRD) Datacom

2 Same, Same but Different Datacom

3 Are these Jandals or Thongs? Datacom

4 Is this a Duvet or a Doona? Datacom

5 Would this be a Chillibin or Esky? Datacom

6 Datacom

7 About Datacom IT services company Approx staff Present in Australia/New Zealand and Asia Over 50 year history in payroll Datacom

8 Agenda: 1. PAYE and tax differences 2. Pay Day Reporting 3. KiwiSaver 4. Annual Holidays 5. BAPS leave 6. Terminations 7. Questions Datacom

9 PAYE Differences Datacom

10 Primary Employment Tax Codes Taxable Income Tax Rate Up to $14, % Over $14,000 and up to $48, % Over $48,000 and up to $70,000 30% Over $70,000 33% M is the most common tax code ME is used if certain special conditions are met Datacom

11 Secondary Employment Tax Codes Taxable Income Tax Rate Tax Code Up to $14, % SB Over $14,000 and up to $48, % S Over $48,000 and up to $70,000 30% SH Over $70,000 33% ST Used when an employee has multiple employments Job with highest earnings will use primary code and others use the relevant secondary tax code Not used at the main source of income Datacom

12 Student Loan Tax Codes If the employee has a student loan they must use the relevant tax code with SL at the end, e.g. M SL Repayments aren t made on first $19,448 of taxable income Optional and compulsory payments can be made Datacom

13 Other Tax Codes Tax Code Meaning Rate ND Not Declared 45% WT Schedular Payments Dependent on Job STC Special Tax Code Advised by IRD EDW Election Day Workers 17.5% CAE Casual Agriculture Workers 17.5% NSW Recognised Seasonal Workers 10.5% Datacom

14 ACC Earners Levy 1.39% of gross taxable earning Maximum earnings limit of $126,286 Notable payment exceptions: Redundancy Retirement Employee Share Scheme Not to be confused with the ACC Work Levy Datacom

15 Extra Pays Taxable Income Tax Rate Up to $14, % Over $14,000 and up to $48, % Over $48,000 and up to $70,000 30% Over $70,000 33% TTTTTT BBBBBBBBBBBBBB = LLLLLLLL 4 WWWWWWWWWW EEEEEEEEEEEEEEEE 13 * If paid monthly take last month and multiply by 12 Datacom

16 Payroll Tax There is NO payroll tax! Datacom

17 Update on payday filing The Association for Payroll Specialists 1 & 2 November 2018 UNCLASSIFIED 1

18 Where we re at (enabled by software) +/- 200 potential developers contacted +/- 100 confirmed as developing or providing payroll software in NZ ~40% Gateway ~30% File upload ~30% TBC* Gateway: 5 live & 20+ in test File upload: 2 live UNCLASSIFIED 2

19 Payday filing what s different for an employer? File Employment Information Schedule within two working days after each payday, instead of an employer monthly schedule. Additional information required at employee line level, including: o ESCT o pay period start/end dates, and o pay cycle. Employers eligible to file by paper have 10 working days. Not required to file nil returns. UNCLASSIFIED 3

20 Payday filing what s new for an employer? Need to also file Employee Details about new and departing employees. Information required includes: o start or end date of employment o KiwiSaver status o contact details, and o date of birth (if given to you by employee). File on or before new employee s first payday. File when departing employee comes off payroll. UNCLASSIFIED 4

21 Payday filing filing electronically Four options: o direct from software, using our Gateway Services o file upload in myir, or o onscreen in myir. Employers with $50,000 PAYE and ESCT or more per year must file electronically. UNCLASSIFIED 5

22 UNCLASSIFIED 6 Payday filing direct from software (using Gateway Services)

23 Benefits of filing direct from software (using Gateway Services) Gateway Services: o supports seamless filing, and o removes the need for filing manually via myir. Set up new employees with the right information from the start (including tax codes, IRD number and KiwiSaver status), which removes the need for many notifications. Options to potentially: o pre-populate information o confirm employee details o retrieve information dynamically, and o make amendments easier. UNCLASSIFIED 7

24 Payday filing common questions Why does Inland Revenue need this information more frequently? I only employ one other person. Do I need to payday file? I pay one-off (ad hoc) pays three times in a week. Does that mean I have to file three times a week as well? What happens over Christmas time? Can we file in advance before we go on holiday? I have a group of employees who are paid monthly and another paid fortnightly. How will this work under payday filing? UNCLASSIFIED 10

25 Payday filing more common questions Date of birth: o What do you mean by DOB if available? o What if we don t collect DOB information? o Should we let our employees know about this? Do I need to maintain contact details in the IR system? Do I need to submit a nil return? Can I pay when I file? UNCLASSIFIED 11

26 Payday filing summary Mandatory from April 2019, but employers can opt in now. Start payday filing at beginning of a month. Need to file final employer monthly schedule. Once shifted to payday filing, employers should review and update myir delegations. Can opt in through myir (unless filing direct from software). Employers with a bespoke system should us on Payday.Reporting@ird.govt.nz. Complete other recommended actions from this presentation. UNCLASSIFIED 12

27 For more information Visit Get in touch with Community Compliance Sign up for one of our newsletters Connect with us on: o Twitter o LinkedIn o Facebook Stay tuned for webinars visit cchlearning.co.nz IRTransformation@ird.govt.nz UNCLASSIFIED 13

28 Questions? Pop by and see us at the booth. UNCLASSIFIED 14

29 KiwiSaver Datacom

30 Differences with Australia Fully managed by the IRD No clearing houses Reporting handled within regular IRD tax reports Both employee and employer contribute Government contributions up to $ per year Datacom

31 Automatic Enrolment Conditions 18 to 64 years old Permanent or fixed term contract Each time you change jobs 8 weeks to decide if you want to opt-out Datacom

32 Exceptions Enrolled in a Superannuation scheme that is KiwiSaver compliant Not NZ citizen or permanent resident Employer has no obligation to pay their contributions if employee is under 18 or over 65 Datacom

33 Contributions Employee 3%, 4%, or 8% only Additional contributions in payroll Payments outside of payroll Employer 3% or higher One off payments Datacom

34 Contributions Holiday Enrolled for 12 months before applying Can range between 3 months to 5 years No limit to amount you can take Employers are not obligated to make their contributions Datacom

35 Leave and Termination Differences Datacom

36 Holidays Act Compliance Datacom

37 Annual Leave 4 weeks entitlement No extra week for shift workers in base legislation Only the fourth week of entitlement can be cashed up No concept of accrued leave Leave must be valued relative to the time it is taken or earned Datacom

38 Annual Leave Meet Mary. She starts on a part time basis for 3 days a week, working 8 hours per day or 24 hours per week. Halfway through the year, she increase her hours to a full time employee, working 5 days a week and 8 hours a day. Datacom

39 Annual Leave How many Hours of annual leave does Mary have after 12 months? A. 96 hours B. 128 hours C. 160 hours D. Open all hours Datacom

40 Annual Leave How many Hours of annual leave does Mary have after 12 months? A. 96 hours B. 128 hours C. 160 hours (CORRECT IN NZ) D. Open all hours Datacom

41 Payment for Annual Leave In Australia Paid at base rate of pay for ordinary hours worked Leave loading according to award or workplace agreement Datacom

42 Payment for Annual Leave in New Zealand Determine Proportion of the Week Taken Average Weekly Earnings (AWE) 1/52 of gross earnings Ordinary Weekly Pay (OWP) What an employee receives for an ordinary working week Includes productivity or incentive based payments if those payment are regular Includes overtime payments if the payment is regular Ordinary Weekly Pay (2) If not possible to determine OWP directly, then alternative calculation is given Gross earnings less non regular payments paid in last 4 weeks Divided by 4 Pay the higher of Average Weekly Earnings or Ordinary Weekly Pay * Proportion of Week Taken Datacom

43 BAPS Leave Bereavement, Alternative Holidays, Public Holidays and Sick Leave Described in units of days No concept of accrued leave (with respect to sick leave) Leave must be valued relative to the time it is taken or earned Datacom

44 Sick Leave Equivalent to personal and carers leave 5 days granted after 6 months continuous service Accumulates to a maximum of 20 days Can not be cashed-up Datacom

45 Sick Leave Meet Mary. She starts on a part time basis for 3 days a week, working 8 hours per day or 24 hours per week. Halfway through the year, she increase her hours to a full time employee, working 5 days a week 8 hours a day. Datacom

46 Sick Leave If Mary had been granted her sick leave in hours, what should she have been entitled to after 6 months? A. 24 hours B. 40 hours C. 32 hours D. One of the above? Datacom

47 Sick Leave If Mary had been granted her sick leave in hours, what should she have been entitled to after 6 months? A. 24 hours B. 40 hours (Correct in NZ) C. 32 hours D. One of the above? Datacom

48 Bereavement Leave Equivalent to compassionate leave but not used for serious illness or injury Entitled after 6 months continuous service 3 days for immediate family and 1 day for others where employee feels bereaved Immediate family member includes: Spouse or partner Parent Child Brother or sister Grandparent Grandchild Spouse or partners parent Datacom

49 Alternative Leave Granted for working on a public holiday Includes being on call if restrictive Not to be confused with time-in-lieu Only entitled if public holiday normally a day of work Can be cashed-up after one year Can be taken on any day by agreement Regardless of hours worked on the public holiday, an entire day is granted Datacom

50 Public Holidays 10 national holidays and one regional holiday observed Mondayisation applies to any public holiday that doesn t fall on a Friday or Monday Payment must be made at time and a half for working on a public holiday Datacom

51 Payments for BAPS leave types Paid at Relevant Daily Pay (RDP) Pay employee would have received had the employee worked on the day concerned Includes incentive, productivity and overtime payments If not practical or possible to determine RDP pay at Average Daily Pay instead Gross Pay in preceding 12 months divided by number of whole or part days paid Where part day is paid it is counted as a full day Datacom

52 Long Service Leave Not a legislated leave type in New Zealand Only by agreement and relatively uncommon for employees for pay office Datacom

53 Termination payments Termination payments include: Unused annual leave Public Holidays Unused alternative holidays Any agreed entitlements Redundancy payments are not mandatory Annual leave termination value Entitled leave paid at the higher of AWE or OWP 8% of gross earnings includes termination payments Taxation implications Termination payments taxed using Extra Pay rules No earner levy or KiwiSaver taken on redundancy payments Datacom

54 Summary Same-Same but different In Australia Taxation, superannuation and general payroll more complicated In New Zealand Leave management more complicated (except for Long service leave) Datacom

55 Questions? Datacom