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Employer responsibilities
Ngā kaiwhakawhiwhi mahi takohanga

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.

PAYE deductions

PAYE (pay as you earn) is the basic deduction made from an employees' wages. It includes an ACC earners' levy. PAYE deduction tables and an online calculator are tools to help calculate the amount to deduct.

Employee share scheme (ESS) benefits

Effective 1 April 2017 you will be able to tax an employee share scheme (ESS) benefit as an “extra pay” and withhold the appropriate amount of PAYE and any social policy obligations such as student loans and child support.

Student loan repayment deductions

You must make student loan repayment deductions for employees using a primary (main) tax code, when they earn above the pay period repayment threshold. If they are using a secondary tax code you must make student loan repayment deductions from all of their secondary earnings. You can also be asked to make voluntary or compulsory extra deductions.

Child support deductions

As an employer, you may need to make child support deductions from an employee's pay. If so, we will send you notice of the amount to deduct.

Employer superannuation contribution tax (ESCT)

If you have employees who belong to a superannuation scheme (eg, KiwiSaver) you'll usually pay employer contributions to the scheme. Employer superannuation contribution tax (ESCT) is a tax deducted from the employer superannuation cash contributions you pay into the employee's KiwiSaver or superannuation account.

KiwiSaver

From 1 July 2007 employers must deduct employees' KiwiSaver contributions from their before-tax pay using the PAYE system. All employers must make KiwiSaver available to new staff, unless the employer qualifies for an exemption from automatic enrolment.

Tax credits for payroll donations

Tax credits for payroll donations are calculated for each employee who makes a donation using payroll giving. The amount of the tax credit is 33.3333 cents for each dollar donation. This is reflected in the reduced PAYE payable.