PayBiz Superannuation NZ 13/11/2018 Contents Superannuation Pay Type... 2 Window Control Buttons... 4 NZ Kiwisaver... 5 Kiwisaver with ESCT... 5 Kiwisaver with Total Remuneration... 7 Kiwisaver using Employee Tax Rate... 9 Stopping Kiwisaver Employer Contributions... 11 IRD File and Superannuation Report... 12
Superannuation Pay Type PayBiz main menu > Payroll > Pay Types > Add > Pay Type Superannuation > Ok Allows superannuation to be included on the payslip. Figure 1: Kiwisaver Using ESCT Rate Field Pay Type Employee Contribution is Dollar Pre tax Description Inactive Employee Use Woti + Overtime Description Up to 6 alpha-numeric characters. Unique code for the pay type. If ticked then the employee contribution is a fixed dollar figure else it is a percentage of Gross. If ticked employees contribution is deducted before tax. Up to 30 alpha-numeric characters. Description of pay type. Note: This is what prints on the payslip Tick to mark pay type as inactive. Inactive pay types cannot be used on payslips or tally sheet lines. Inactive pay types will not appear in pay type lookup screens when the ACTIVE Pay Types by Type filter is used. Australia only field Continued Page 2 of 13
Field Use Employee Tax NZ Approved Scheme Employer Contribution % Employer Tax % Reportable Super % Employer Use Woti + Ov Employer Contribution is Dollar No Threshold P&L expense G/L code Super Fund B/S G/L code Employer Tax G/L code Description Uses the Employee personal tax rate rather than an ESCT rate. Tick if an approved NZ super scheme eg KiwiSaver Needs to be ticked for details to be included on the IR Monthly Schedule for IRD. Can exclude non-approved pay types from the Superannuation Report. Numeric value up to 2 decimal places. The percentage of the employee s gross pay that the Employer contributes. Numeric value up to 2 decimal places. The percentage that the Employer s contribution will be taxed. ) Australia only fields ) If ticked then the employers contribution is a flat $ value not a percentage. Australia only field. Balance Sheet debit code where deductions will be accrued. Balance Sheet credit code to accrue the nett super fund contribution (employee + employer - employer tax) Balance Sheet credit code to accrue the employer tax on contribution Enter the code or Double Click or F8 for a lookup. G/L fields are only enabled if the General Ledger optional module has been purchased. If G/L has been purchased, codes must be entered for Super Fund and Employer Tax. If the Expense code is not entered, then it will post to the employee P&L wages code. Page 3 of 13
Window Control Buttons Figure 2: Window Control Buttons Button Save Save Exit Save & Add Details Analysis Delete Exit / Exit No Save Description Saves the current record. Saves and closes the current window. Saves and opens an empty ADD window. Opens a list of payslip lines using this pay type. Double click on the line to open the payslip screen. Useful for Search and Report functions. Not applicable for pay types. Deletes the current pay type. Pay Types can only be deleted if they have not been used on a payslip line. Use the Inactive checkbox to deactivate used pay types. Close the window. Go to: First / Previous / Next / Last record. Page 4 of 13
NZ Kiwisaver For the current IRD information see: http://www.ird.govt.nz/kiwisaver/employers/ All employer superannuation cash contributions (employer contributions) paid to a superannuation fund, including KiwiSaver schemes and complying funds, for the benefit of an employee are liable for ESCT (employer's superannuation contribution tax). The exception to this is if the employee and employer have agreed to treat some or all of the employer contribution as salary or wages under the PAYE rules. Kiwisaver with ESCT ESCT is calculated at a rate based on the employee's total annual salary or wages plus gross employer contributions for the previous tax year (1 April to 31 March). When employees haven't worked for the employer for the full previous tax year, the rate is based on the employer's estimate of the employee's total salary or wages plus gross employer contributions they will receive in the tax year for which the ESCT is being calculated. Use the following table to work out the correct ESCT rate to use. Employee's salary or wage income for year ended 31 March (including gross superannuation employer contributions) ESCT from 1 April $0 to $16,800 10.5% $16,801 to $57,600 17.5% $57,601 to $84,000 30% $84,001 upwards 33% Note: You will need to set up a new superannuation pay type for each different ESCT that you need. Page 5 of 13
Example: Figure 3: Kiwisaver with ESCT Standard Kiwisaver employee contributions are a % of the gross pay. Employee Contribution is Dollar is not ticked. Kiwisaver is taken after tax, so Pre tax is not ticked. NZ Approved Scheme is ticked to ensure the deductions show on the IR File, the IRD Monthly Schedule. Employer Contribution % in this example is set to 3%. Employer Contribution is Dollar is not ticked. Employer Tax % is set at 30% To use this pay type, enter a new Standing Transaction for this pay type on the employee. The Quantity is the employee s contribution percentage. In the example below, this is 3%. Figure 4: Employee Standing Transaction Line The employee s contribution, employer s contribution and ESCT will all be calculated automatically as lines are added to the payslip. The employee s contribution prints on the payslip in the after tax section under the PAYE, using the pay type description. The quantity on the pay slip line is printed beside the total eg ( 3.00 % Gross). The employer s contribution shows at the bottom of the pay slip. If Show Ytd Gross and Paye is ticked on Payslip Setup then the Ytd Employer Contribution will print in brackets. ESCT is calculated using the rate entered on the pay type. Page 6 of 13
Kiwisaver with Total Remuneration Total Remuneration an agreed salary/wage package that includes the value of the Kiwisaver Employer contribution and associated taxes in the pay rate. a. The employer will pay ESCT (employer superannuation contribution tax) and any other applicable taxes. Use a standard Kiwisaver pay type with the appropriate ESCT percentage. b. The employee and employer agree that all employer superannuation contributions will be treated as salary/wages and taxed via PAYE. The employee can cancel this arrangement in writing at any time. Create a new taxable Deduction pay type for the Compulsory Employer Contribution: Figure 5: Compulsory Employer Contribution Deduction Add this to the employee Custom % Deduction where the % is the compulsory employer contribution, currently set at 3%: Create a Superannuation pay type with 0% ESCT: Figure 6: Custom % Deduction Figure 7: Superannuation pay type for Total Remuneration Page 7 of 13
Add this Superannuation pay type with 0% ESCT as a standing line on the employee, where the Quantity entered is the percentage the employee is contributing: Figure 8: Kiwisaver Standing Line This means both the Employee Contribution and the Compulsory Employer Contribution, that is included in the employee s rate of pay, will show as a deduction after tax on the payslip and will then show again at the bottom of the payslip along with the year to date total of employer contribution: Page 8 of 13
Kiwisaver using Employee Tax Rate If the employer and employee agree, the amount of employer contribution can be treated as the employee's salary or wages and PAYE must be withheld. If employers agree, employees can choose to have all or part of the value of the employer's contribution included in their gross salary and wages and taxed at their personal tax rates. Employees must understand that classifying this amount as salary and wages will affect: their Working for Families Tax Credits their independent earner tax credit entitlements the amount of child support they pay, and their student loan repayments. However, they can change back at any time. The actual employer contribution is paid into the superannuation fund - the employee doesn't receive the contribution in the hand. The value of the employer contribution will be added to the employee's gross wages for the pay period and taxed at the appropriate rate using the PAYE tables. The rate will depend on the employee's tax code. Contributions treated as salary and wages are subject to earner's levy (ACC). Example: Figure 9: Kiwisaver Using Employee Tax Rate Standard Kiwisaver employee contributions are a % of the gross pay. Employee Contribution is Dollar is not ticked. Kiwisaver is taken after tax, so Pre tax is not ticked. Use Employee Tax is ticked. NZ Approved Scheme is ticked to ensure the deductions show on the IR File, the IRD Monthly Schedule. Employer Contribution % in this example is set to 3%. Employer Contribution is Dollar is not ticked. Employer Tax % is not set. To use this pay type, enter a new Standing Transaction for this pay type on the employee. The Quantity is the employee s contribution percentage. In the example below, this is 3%. Page 9 of 13
Figure 10: Employee Standing Transaction Line The employee s contribution, employer s contribution and ESCT will all be calculated automatically as lines are added to the payslip. The employee s contribution prints on the payslip in the after tax section under the PAYE, using the pay type description. The quantity on the pay slip line is printed beside the total eg (3.00 % Gross). The employer s contribution shows at the bottom of the pay slip. If Show Ytd Gross and Paye is ticked on Payslip Setup then the Ytd Employer Contribution will print in brackets. ESCT is calculated using the Employees tax rate. Page 10 of 13
Stopping Kiwisaver Employer Contributions Employers are required to contribute to their employee's KiwiSaver account or complying fund at 3% of the employee s gross salary or wage. You need to make contributions if your employee: is having KiwiSaver or complying fund member contributions deducted from their salary or wages, and is aged 18 and over, and has not reached the age of eligibility for New Zealand Super (currently 65), or has not been a member of a KiwiSaver scheme or complying fund for five years, whichever date is later, and is not a member of a defined benefit scheme. 3% is the minimum contribution rate from 1 April 2013. Withdrawal Date Employees become eligible to withdraw all or part of their savings when they reach the age to qualify for NZ Super (currently 65) as long as they've been a KiwiSaver member for a minimum of 5 years. The date employees become eligible to withdraw savings is known as their withdrawal date. Employees are no longer required to make contributions to KiwiSaver after their withdrawal date but can continue to make contributions if they wish. If employees decide to stop making contributions, they must complete a Non-deduction notice (KS51) and give it to their employer. Setup for Employees who wish to Continue to make Kiwisaver Contributions 1. You will need to set up a new pay type where the Employer Contribution Percentage is zero. Example: Figure 11: Kiwisaver with no Employer Contribution 2. Replace the current Standing Transaction line on the employee with a new one using this pay type. The quantity is the employee s contribution percentage, ie. 3, 4 or 8. Page 11 of 13
IRD File and Superannuation Report Superannuation is reported to the IRD via Payday Filing using the IRD File option, and paid via the monthly EDF. This information will print on the IRD File report and will add the appropriate columns to the electronic copy of the file. The Superannuation Report from the Reports menu will list all contributions from employers and employees for each fund for a given date range. Figure 12: Superannuation Report Sample - NZ Page 12 of 13
With Employee Details ticked: Figure 13: Employee Details ticked Page 13 of 13