Issue 59 December 2003 (Payroll News)

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Payroll News - 2003

Issue 59 December 2003

Due dates over the holiday period
Employing seasonal or casual workers
Business hours for phone enquiries over Christmas and New Year
Transferring your PAYE obligations to a PAYE intermediary
Need your employer monthly schedule (EMS) early?
Update for non-resident contractors
INFOexpress enhancement
Happy New Year bonus for business

Due dates over the holiday period

If you pay your deductions to us twice a month, your PAYE forms and deductions for the period 16 December to 31 December 2003 are due to us by 15 January 2004, instead of 5 January 2004. This means you don't have to rush to get your PAYE forms completed before the Christmas break.

But, if you pay your deductions to us monthly, your PAYE forms and deductions for the period 1 December to 31 December 2003 are due (as usual) on 20 January 2004.

Employing seasonal or casual workers

At this time of year some of you may be employing seasonal workers (such as fruit pickers or shearers), or casual workers (such as in the entertainment and hospitality industry).

If you intend to employ seasonal or casual workers, you need to make sure all new employees complete a Tax code declaration (IR330) form. You will also need to make sure that when these employees start and finish working for you, you show the start and/or finish date for each employee on the relevant Employer monthly schedule (IR348).

However, there are just a few more points to be aware of...

Casual agricultural workers

A casual agricultural worker is a person engaged in casual agricultural work on a day-to-day basis for up to three months. The person must be employed for the exclusive purpose of doing seasonal agricultural, horticultural, orchard, tobacco farming, market gardening, or nursery work, or other seasonal work of a similar nature.

The tax code for casual agricultural workers is CAE, and they select this code on their IR330. Deduct tax through the PAYE system at a flat rate. The current rate is 22.2 cents in the dollar (this includes ACC earners' levy).
If they do not complete an IR330 fully, eg don't provide their IRD number, you must deduct PAYE at the no-declaration rate of 46.2 cents in the dollar (this includes ACC earners' levy).
You must have employment records for all these employees.

Casual workers

Your employee's tax code tells you which rate to use when deducting PAYE from their wages.
If you employ casual staff, they may make the mistake of using the wrong tax code. If it is their second job, remind them to use a secondary tax code.
Similar to casual agricultural workers, if your employee doesn't complete an IR330 fully, eg doesn't provide their IRD number, you must deduct PAYE at the no-declaration rate of 46.2 cents in the dollar (which includes ACC earners' levy).
You must have employment records for all these employees.

Note: Agricultural contractors, shearing contractors and musicians (hired on a casual basis) are not employees subject to PAYE deductions. Withholding tax should be deducted from payments made to these workers at the rate listed in the PAYE deduction tables and on the back of the Tax code declaration (IR330). However, if these workers supply you with a Certificate of exemption (IR331) you can make payments to them without deducting withholding tax.

For further information call us on 0800 377 772.

Business hours for phone enquiries over Christmas and New Year

Our business hours for phone enquiries over the Christmas and New Year break are:

Wednesday 24 December	8 am - 8 pm
Thursday 25 December	Closed
Friday 26 December	Closed
Saturday 27 December	Closed
Monday 29 December	8.30 am - 5 pm
Tuesday 30 December	8.30 am - 5 pm
Wednesday 31 December	8.30 am - 5 pm
Thursday 1 January	Closed
Friday 2 January	Closed
Saturday 3 January	Closed
Monday 5 January	8 am - 8 pm

Our normal hours of service (8 am to 8 pm weekdays and 9 am to 1pm Saturdays) will resume from 5 January 2004.

Note: The Child Support enquiry line 0800 220 222 will close at 4.30pm on 24 December and re-open on 5 January 2004.

Transferring your PAYE obligations to a PAYE intermediary.

In March 2003, legislation was passed which will from 1 April 2004, allow employers to transfer their PAYE obligations to a PAYE intermediary.

Note: A PAYE intermediary might include an existing payroll service provider, accountant or other tax professional who offers and provides payroll services to an employer.

For pay periods commencing on or after 1 April 2004, employers will be able to provide all their payroll information and payments to an intermediary.

The intermediary will be responsible for:

calculating the employer's payroll information
paying the employer's employees (including the payment of any third party deductions)
paying the employer's tax deductions (including student loans, child support, specified superannuation contribution withholding tax and employee-related tax arrears payments) to Inland Revenue
meeting all the employer return filing requirements.

Providing an employer has supplied the intermediary with all their payroll information and gross payments, the responsibility for applying the PAYE rules correctly will rest with the intermediary and not the employer.

Further details about how the PAYE intermediary service is going to work will be made available to employers in Payroll News, February 2004.

Need your employer monthly schedule (EMS) early?

Are you going to be away on holiday or will your business be closed for the holidays when your next Employer monthly schedule (IR348) is due to arrive and be sent back?

Generally, we will get these forms to you around the 4th of the month in which the payment and forms are due. But if you require the forms before this date you can either get a blank Employer monthly schedule (IR348) from our website or call our automated phone service INFOexpress on 0800 257 773.

Update for non-resident contractors

The November issue of Payroll News had an update about the changes for non-resident contractors who receive contract payments. We'd like to remind you of those changes and confirm that they are now effective.

The changes include:

extending the time that contractors eligible for relief under a double tax agreement may work in New Zealand without having to seek a certificate of exemption from 62 days to 92 days, and
exempting payments for contract work amounting to less than $15,000 within a 12-month period.

These changes were effective from 1 December 2003.

For more information please read Tax Information Bulletin (TIB) Vol 15, No 11 (November 2003).

INFOexpress enhancement

Inland Revenue is about to introduce Natural Language Speech Recognition (NLSR) technology to enhance our INFOexpress service. NLSR technology will enable callers to request options with their voice, rather than having to key in numbers on their touch tone phone.

Customers will be able to interact with Inland Revenue by telephone in a more natural way, while still being able to choose other self-service options, such as online services, if they prefer. The NLSR technology is being introduced from 5 January 2004.

If you would like to trial the new system to order stationery, please phone 0800 220 014 (from 5 January to end of January 2004).

Happy New Year bonus for business

Good news-from 1 January freepost envelopes will be provided for regular remittances by employers and GST registered businesses. This will cover PAYE, GST and fringe benefit tax.

Kathy Clement says: "We have done a lot of research with business over the past couple of years on business tax compliance costs and the issue of postage costs for filing returns has been raised consistently.

"Government has listened to business concerns and provided funding to make this happen. It is a small step but it is in the right direction," says Kathy.

You will begin to receive the new freepost envelopes when the forms for January are mailed to you.

Kathy said Inland Revenue was pleased with the level of response to the recent consultation on the discussion document Making tax easier for small businesses, and wanted to thank all those who sent in their views.