Payroll News - 2009
Payroll News issue 119 July 2009
- Budget announcement 2009 - a quick summary
- When workers cease employment
- Getting your newsletters online
- Online services - manage account access (MAA)
- Do I pay GST on fringe benefits?
- Tax calendar
- Saving trees and saving time
- Student loan "Notify Me" e-newsletter
- PAYE tables column change
Welcome to Payroll News
In this issue: Budget announcement, ceasing employment, online newsletters, online services, GST on fringe benefits, Tool for business and PAYE tables.
If you have a topic you'd like to see covered in this newsletter, please email us at payroll.news@ird.govt.nz and we'll aim to cover it in a future edition.
Budget announcement 2009 - a quick summary
- Personal income tax cuts planned for 1 April 2010 and 1 April 2011 have been delayed. Tax cuts that came into effect on 1 April 2009 remain.
- Increase in the independent earner tax credit planned for 1 April 2010 has been cancelled.
- The KiwiSaver mortgage diversion facility closes to new applicants from 1 June 2009. It will remain available to existing participants.
Find out more about the policy updates on the Policy Advice Division website.
When workers cease employment
If your employee stops working for you, show your employee's finish date on the Employer monthly schedule IR348 (EMS). You'll also need to calculate their holiday pay.
If they are rehired in the same year you must complete another Tax code declaration (IR330). You'll also need to show your employee's start date on your next EMS.
Calculating holiday pay
Before calculating your employee's holiday pay you need to work out the gross amount payable to your employee. The Department of Labour website has more information and an online tool to help you calculate holiday pay entitlements.
To calculate how much PAYE to deduct from your employee's holiday pay, go to "Work it out", keyword "PAYE", "Calculate tax on holiday pay - 2010". You can print a copy of the calculation with your employee's name and IRD number. You'll also find some examples on how to calculate your employee's holiday pay in our PAYE tables (IR340 or IR341). Include holiday pay as earnings in the period that you actually paid your employees.
Getting your newsletters online
We know how important it can be for businesses to receive timely tax information. To fast-track this information to you we will be publishing our newsletters online only from now on.
Your email subscription will mean you receive emails alerting you to relevant tax information such as:
- changes to tax policy
- reminders of due dates for payments
- how to use our online services
plus lots of other useful information.
All you need to do to receive the email is subscribe online.
We're also going to include information about GST in Payroll News and will no longer publish GST News. If you currently receive GST News, don't worry, you'll continue to receive this information in Payroll News.
Online services - manage account access (MAA)
Have you heard about our MAA service that allows you to manage who can access your online account?
Once you've registered, all that's required is for your organisation's owner or authorised representative to call us on 0800 227 770. After answering a few questions your organisation can be up and running.
The account owner will have responsibility for all your organisation's tax information and services. Once you're registered you can delegate access to other people in your organisation who will be sent user IDs and passwords. You can choose for your staff to only have access to some of the services such as "send and receive email", "ir-File" and other e-services, including "Look at account information".
Go to "Secure online services" on the right hand side of this page to register for MAA, or view a demonstration.
Do I pay GST on fringe benefits?
You may need to pay goods and services tax (GST) on some of the fringe benefits you provide.
GST-exempt supplies do not include GST, so their taxable value is GST-exclusive. If these are provided as fringe benefits, for example low-interest loans, overseas travel and life insurance, you won't need to pay GST on them.
Steps to calculate the GST on fringe benefits
- Take the total taxable value of all fringe benefits from Box 3 of your fringe benefit tax (FBT) return.
- Subtract the value of any benefits that are exempt or zero-rated for GST (for example low-interest loans, overseas travel, and life insurance). The result gives you the fringe benefits liable for GST.
- Divide the result by nine and put this adjustment figure in:
- Box 7 of the Fringe benefit tax quarterly return (IR420) for quarterly filers
- Box 6 of the Fringe benefit tax annual return (IR422) and Fringe benefit tax income year return (IR421) for annual and income tax filers.
Find out more about FBT, or read our Fringe benefit tax guide (IR409), which is available under "Forms and guides".
Tax calendar
We have a calculator to help you plan ahead for your tax returns and payments.
To customise a calendar with your own key dates for each of your tax types, go to Calendars and important dates, and "Generate a list of due dates that apply specifically to you".
Saving trees and saving time
Customers have told us they want to receive less printed material from us and have more options to deal with us electronically. To help customers self-manage online and voluntarily comply with their tax obligations, Inland Revenue will be providing more online options. The first cab off the rank is an interactive website for small businesses - the "Tool for business". This business tool will provide you with the latest, up-to-date business information at your fingertips.
The new "Tool for business"
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The "Tool for business" will help you understand business tax quickly and simply. It's free, interactive, easy to use and covers these questions:
- How do I start a business?
- What records do I need to keep?
- How does tax work?
- Do I need to register for GST?
- What do I do if I employ someone?
You'll also find many useful links and resources, such as podcasts, templates and animations on a range of topics, for example, calculating employee deductions and registering for GST.
With this tool in place we can save trees as we will send out fewer printed publications every year.
This means we can update our online guides more quickly and keep the information current. Bookmark our "Tool for business" now - once you see how useful it is we're sure you'll be coming back for more.
Check out the Tool for business >
Student loan "Notify Me" e-newsletter
"Notify Me" is our new e-newsletter for student loans that contains information including:
- changes to student loan policy (including updates to the voluntary repayment bonus)
- reminders of due dates for payments
- what to do if you're going overseas
- using the right tax code
plus lots of other useful student loan information.
You can subscribe online to all our newsletters including "Notify Me".
You won't be able to reply to the emails we send you through this service. If you wish to send us secure emails or check student loan details online you'll need to register for online services.
PAYE tables column change
We've made a small change to the layout of the PAYE tables (the IR340 weekly and fortnightly, and IR341 four-weekly and monthly).
The 2010 tables (in the April 2009 version) have combined the student loan and PAYE amounts with the ME SL tax code in one column.
Previous version of tables with stand-alone ME SL column
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The new combined column has been divided to show PAYE and student loan amounts. This will make it easier to complete your employer monthly schedule.
New 2010 version of tables with combined M SL and ME SL column
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The new online versions of the PAYE tables (IR340 and IR341) will be available soon.
To calculate PAYE, use our online PAYE/KiwiSaver calculator.
Printing error on pages 90-133 of the IR341
The headings on pages 90-133 of the Four-weekly and monthly PAYE tables 2010 (IR341) were incorrect. The headings should read "Four-weekly and monthly PAYE deduction tables" not "Weekly and fortnightly PAYE deduction tables".
The calculations for all the secondary tax codes are correct.
We apologise for this error. The online version of the PAYE tables has already been amended.
Alan Quinn
Manager
Customer and Product Innovation
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Date published: 03 Jul 2009
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