Payroll News Issue 82 February 2006 (Payroll News)

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Payroll News - 2006

Payroll News Issue 82 February 2006

2007 PAYE deduction tables
Provisional tax due date
Payment due date for large employers
Child support deduction notices
Mileage rates
Improved deduction notice

Welcome to Payroll News

If you have an employer topic you'd like to see covered in this newsletter, please write to the Editor, Payroll News, PO Box 2198, Wellington or email us at payroll.news@ird.govt.nz and we'll aim to cover the topic in a future edition.

2007 PAYE deduction tables

Your 2007 PAYE deduction tables will be sent to you in early March, unless you've told us that you don't want to receive them. We will send you either the 2007 Weekly and fortnightly PAYE deduction tables (IR340) or the 2007 Four-weekly and monthly PAYE deduction tables (IR341) or both.

The 2007 tax deduction tables contain changes to the student loan and ACC earner's levy deductions.

Please use these deduction tables for payments you make to your employees from 1 April 2006. If you currently view our tax deduction tables on the web and have bookmarked these as a favourite, please remember to delete the 2006 bookmark and bookmark the 2007 edition from 1 April 2006.

If you prefer, you can calculate your employee's salary or wages at > Work it out > PAYE > PAYE calculator 2007.

The amount to deduct from holiday pay can be calculated at > Work it out > PAYE > Calculate tax on holiday pay - 2007. Please remember to update your bookmarks for these calculators as well.

Provisional tax due date

If you pay provisional tax and have a standard balance date of 31 March, in February we will send you a letter and payment slip advising you that your third instalment of 2006 provisional tax is due on Tuesday 7 March 2006.

You can make your provisional tax payment:

electronically through your bank
by sending us your cheque and payment slip in the reply envelope
by taking the payment (cash or cheque) and payment slip into your nearest Westpac branch
by paying through your tax pooling intermediary company.

Payment due date for large employers

5 February falls on a Sunday and Monday 6 February is Waitangi Day. Your Employer deductions (IR345) or (IR346) form, payment and Employer monthly schedule (IR348) for this period will be due on Tuesday 7 February.

Child support deduction notices

If you make child support deductions on behalf of your employees, in March you may receive a child support deduction notice for employees whose deduction amounts change. If you don't receive a new notice please continue to deduct child support at the existing rate.

The new notice tells you when to start deducting the new amounts and how much to deduct.

Usually, we issue an individual notice for each employee you make deductions for. However, we sometimes send you deduction notices in the following formats:

a consolidated deduction notice - in schedule form showing all additions and changes to child support payments for multiple employees on the same schedule
both individual deduction notices and a consolidated deduction notice.

You may find it easier to process deduction notices if they are sent in one of the above formats. If you would like to change the format of your child support deduction notices please call us on 0800 220 222.

Note:

It's important to use the variation codes to advise us of any deduction variations for your staff and to provide an end date for staff that have ceased employment with you. For more information on what variation code to use, please see our Employer's guide (IR335). You can download this from "Forms and guides" or get one by calling 0800 257 773.

Mileage rates

In September we reviewed the mileage rates that can be applied to reimburse an employee for the work-related use of their private motor vehicle. You can use one of the following options:

the rates published by a reputable independent New Zealand source (eg New Zealand Automobile Association mileage rates) as long as they represent a reasonable estimate
your own rate, as long as this represents a reasonable estimate of expenditure incurred by an employee
actual rates (this is the amount your employee actually spent and provided receipts for)
rates published by us in the February 1996 Tax Information Bulletin Vol 7, No 8 which can be found at > Newsletters and bulletins > Tax Information Bulletin

For more information about mileage rates go to Businesses > Payroll for employers > Payments to employees > Allowances > Mileage rates for employee reimbursement andself-employed people.

Improved deduction notice

A deduction notice is only issued to an employer in the final stage of recovering an employee tax debt. Employers are legally required to help recover overdue tax in these situations.

From March 2006 the format of our deduction notices will look like the example shown below. It has the following features:

Option to phone or post a reply slip
Step-by-step instructions
Clear deduction start date
Clear payment instructions

Notice to deduct amounts owed to Inland Revenue

ABC COMPANY LIMITED
BOX 12-345
AUCKLAND

Employee name:	Alice Smith
IRD number:	12-234-678
Amount:	$1000.00

If this employee has recently left, please call us on 0800 227 771 or send in the attached reply slip.

Amount to deduct
You are required to deduct an amount calculated weekly (by the way of instalments), which is the lesser of:

$100.00, or
20% of the gross wages or salary including bonuses, holiday pay and overtime payable that week. You wil need to calculate this amount.

If the employee is not paid weekly, you need to multiply the deduction amount to suit the pay period.

If the wages or salary payable in any week is less than $100, the amount to deduct is $10. If the employee asks you to deduct a higher amount, you must do this.

Paying the deductions
Beginning from her next payday, these extra deductions are payable to Inland Revenue by the end of each calendar month. If a payday falls at the end of a calendar month, the extra additions to, and need to be kept separate from, the usual PAYE deductions.
Please keep making the extra deductions until:

you receive a notice from us asking you to stop makng the deductions, or
this employee stops working for you (let us know her finish date immediately), or
the total amount owing has been paid.

You can pay:

electronically - please include the following details with your payments:

Particulars	Code	Reference
12-345-678	ARR

by posting us a cheque (include the attached payment slip, or a photocopy, each time)
in person, by cheque or cash at any Westpac branch (please use the payment slip).

Please call us on 0800 227 771 if you have any questions.

Thank you for you assistance.

Martin de Graaf
Area Manager

Kathleen Clement
National Manager
Delivery, Planning and Initiation

Employer enquires 0200 377 772
8am - 8pm weekdays and 9am - 1pm Saturdays