Starting a business: What registrations might you need to complete?
Starting a business - registering as an employer
As soon as you start employing one or more people, you must register as an employer with Inland Revenue. Use the online employer registration or you can download and fill in a printable Employer registration form then post it back to us.
Are your workers employees or are they self-employed?
In general, people working for you are employees if you are controlling how and when they do their work.
To determine whether your worker is an employee or self-employed, answer the following questions.
- Must the worker do the work himself or herself, rather than having the option of hiring someone to help?
- Can you tell the worker what work to do, and when and how to do it?
- Do you pay the worker at a set rate (eg, by the hour, week, month, unit of production)?
- Can the person get overtime or penal rates?
- Does the person work set hours, or a given number of hours each week or month?
- Does the person work at your premises or at another place of your choice?
- Do you set the standards for the amount and quality of work?
- Do you provide sick pay or holiday pay?
If you answered "yes" to most of the questions above, the worker is probably your employee and you should register as an employer.
What happens when you register as an employer?
When you register as an employer, you must begin making PAYE deductions from your employees' earnings and those you pay schedular payments to, and pay these deductions monthly to Inland Revenue.
At the same time, you are automatically registered for Accident Compensation Corporation (ACC) payments. These payments involve:
- employer-based levies and premiums for cover of work accidents and ongoing rehabilitation costs (for which ACC will invoice you)
- the earner levy paid by employees for cover of non-work-related injuries, which is included as part of the PAYE deductions from your employees' pay.
The employer registration form also asks if you are providing:
- fringe benefits or "perks" in addition to salary or wages -- if so, you are registered for fringe benefit tax (FBT)
- employer superannuation contributions (formerly specified superannuation contributions), ie, are you contributing to a superannuation fund for your employees? If so, you are registered for employer superannuation contribution tax (ESCT), formerly specified superannuation contribution withholding tax (SSCWT). Note that making deductions from your employees' wages to pay into a superannuation scheme is not the same as making employer superannuation contributions.
Since 1 July 2007 when KiwiSaver started, employer contributions to KiwiSaver schemes are exempt from ESCT up to a specific amount. You also need to give new employees a KiwiSaver information pack and start the enrolment process. See KiwiSaver for employers for more information.
When you register as an employer, we send you a letter with information you need to get started.
Date published: 16 Jul 2008
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