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Employer responsibilities
Ngā kaiwhakawhiwhi mahi takohanga

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Employer responsibilities

Payroll

Employers must deduct PAYE, including tax on schedular payments (formerly withholding payments) from payments made to staff or contractors. Deductions may also be needed for student loan repayments, child support, KiwiSaver, or any benefits, bonuses or other allowances that you pay.

Tax codes

All employees and contractors receiving schedular payments must complete a tax code declaration. This tells the employer the rate of PAYE or tax to deduct including any student loan repayments.

Accounting for allowances and benefits for staff

Holiday pay, bonuses, allowances, and special benefits paid to employees such as loss of earnings compensation or life insurance premiums are usually liable for tax.

Special types of workers

There are different ways of calculating PAYE for non-residents and other special types of workers.

Deductions from salaries and wages

There are tools available to help employers calculate PAYE and student loan repayment deductions. If child support deductions must be made, we will inform you of the amount. Most employer superannuation contributions are subject to employer superannuation contribution tax (ESCT). Employers must also use the PAYE system to deduct employees' KiwiSaver contributions.

Fringe benefits

Most benefits paid to employees in addition to their salary or wages, for example motor vehicles or low-interest loans, are liable for fringe benefit tax (FBT).

Tax on schedular payments

Employers must deduct tax on schedular payments (formerly withholding payments) from contractors performing activities outlined in schedule 4 of the Income Tax Act 2007. From 1 April 2010, there are legislative changes that impact contractors working in the horticulture and viticulture industries.

Correcting employee tax codes

If an employee is using an incorrect tax code we will send their employer a letter asking them to correct their employee's tax code.