Payroll News Issue 109 August 2008 (Payroll News)

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Payroll News - 2008

Payroll News Issue 109 August 2008

Improved access to Online Services
Update on implementing 1 October tax rate changes
KiwiSaver update
Delayed KiwiSaver opt-outs
New website for small and medium businesses
More ID documents can be used to apply for an IRD number
Reminder - how to correctly file Employer deductions (IR345) forms

Welcome to Payroll News

In this issue: New and improved access to Online Services, an update on implementing 1 October tax rate changes, an update from KiwiSaver and delayed KiwiSaver opt-outs, information on new ID documents individuals can use when applying for an IRD number, a new website for small and medium businesses, and a reminder about filing the Employer deductions (IR345) form correctly.

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 6140 or email us at payroll.news@ird.govt.nz and we'll aim to cover it in a future edition.

Improved access to Online Services

Inland Revenue is improving its online authentication systems for organisations and businesses. More services will be available and you'll be able to:

access more of our Online Services, in particular Look at Account Information (currently, organisations and businesses only have access to ir-File and Send and Receive Mail)
automatically access the Online Services you're entitled to use, based on your user profile (currently, users have to manually select the services they want access to)
set up and administer your organisation's access to our Online Services eg, allowing or restricting staff member access
delegate the above abilities to other people in your organisation.

The ability to authenticate organisations online and open up (or restrict) access to our Online Services is a major step forward for us and our customers. These latest changes follow enhancements to the look and feel of Online Services.

Registration for individuals and businesses will now be a complete online process and a customer's account will be activated straight away.

To take advantage of the new fast-track processes and improved access, someone in your organisation who already has access to our Online Services, and is in a position of legal responsibility, needs to contact us. This is a one-off process aimed at making access easier, going forward. You'll be able to find out more online as we get closer to delivering these improvements.

None of the changes we've rolled out this year will affect the way any of our Online Services operate.

Update on implementing 1 October tax rate changes

Personal income tax rates change from 1 October 2008. We'll issue new tax tables to employers at the end of August. You'll need to start using these from the first pay period that ends on or after 1 October 2008.

We issued an updated payroll software specification in June 2008 to enable payroll developers to provide a new package reflecting the tax rates changes in time for 1 October.

Find out more about the 1 October tax rate changes.

KiwiSaver update

KiwiSaver employer guide (KS4) - clarification

We'd like to clarify two points on page 20 of the KiwiSaver employer guide (KS4).

"Large employer who pays PAYE twice each month - Example two"

The example for George's Tyre Company in August is incorrect. It states that large employers who pay PAYE twice-monthly are limited to the first 15 days' worth of employer tax credit.

However, an employer can claim the full amount of employer tax credit entitlement:
- in the first half of the month
- in the second half of the month, or
- split between both halves of the month if the employer has contributed this amount in employer contributions.
Employers must remember not to claim more than the maximum allowed a month.

So, George's Tyre Company can claim up to $88.57 for the month because they contributed this amount in employer contributions.
Employers can claim an employer tax credit for employer contributions to a KiwiSaver scheme or complying fund.
The example on this page states that George's Tyre Company can claim:
- the lesser of $42.85, or
- the amount of compulsory employer contribution paid for each employee.
This should read: "George's Tyre Company can claim:
- the lesser of $88.57 (maximum employer tax credit able to be claimed for the month), or
- the amount of compulsory employer contributions paid for each employee."

We've updated the online PDF of the KS4 which you can find on the right-hand menu under "Forms and guides".

Questions and answers

Q I've received a letter advising that I haven't claimed my employer tax credit entitlement - but I have.
A Check which period the letter relates to - you could be looking at a different month from the one the letter refers to, or maybe the information you provided has not been entered into our system.

Q Can any employer tax credits be refunded?
A If you've ended up with a credit in your account, it will first be used to off-set any debt. If you don't have any debt, you'll be entitled to a refund.

Q What do I put in Box 11 on my Employer deductions (IR345) form?
A Enter the total employer tax credit amount you've calculated. For more information on how to calculate and claim the employer tax credit, please see page 18 of your KiwiSaver employer guide (KS4), or use the PAYE/KiwiSaver calculator - go to "Work it out".

Q How do I backdate compulsory employer contributions to 1 April 2008?
A You'll need to work out what the compulsory contribution should have been for each employee in each month (1% of gross salary and wages is the minimum employer contribution for the 2008 tax year). Enter that amount on an Employer monthly schedule amendments (IR344) form and pay the amount owing. Or, you can amend your employer tax credit claim to help offset these contributions.

Delayed KiwiSaver opt-outs

We are receiving many calls from employees who want to find out if their opt-out has been approved. However, we are finding their New employee opt-out request (KS10) form has not been received from their employer.

If you receive a completed New employee opt-out request form from your employee(s) please send it to Inland Revenue with your next Employer monthly schedule (IR348) or, you can send the information through ir-File (see "Get it done online" on the right-hand side of this page). For further information about opt-out forms, please go to the KiwiSaver website or call us on 0800 377 772.

New website for small and medium businesses

A new government website has been launched with free resources, tools and information to help small and medium businesses, whether they are starting out, dealing with day-to-day tasks or are ready to expand. The site has useful information and links for everything from laws and regulations to employing staff, from tax to importing and exporting. Check out the site at: www.business.govt.nz

Reminder - how to correctly file Employer deductions (IR345) forms

There are three different ways to file the IR345 form:

Filed online and paid through electronic banking - you don't need to send us any portion of the form.

It's fast, easy and secure to file this form on our website. Go to "Get it done online"and choose "File an employer schedule (ir-File) service". When you pay electronically please ensure you use the tax type DED for the total (Box 13) PAYE deductions.
Filed online and paid by cheque - you only need to send us the payment slip at the bottom of the form.
If not filed online - please send us the whole form.

We know you need to keep a copy for your records but please don't tear off the payment slip. Send the whole form when you've completed it and take a copy for your records. The bottom of the IR345 shows the total amount of the payment only - there is no breakdown into tax types. If you don't send us the whole form, the payment may be allocated incorrectly. If we don't receive the whole form from you, you will automatically get a letter advising that you have not sent in your IR345.