Deductions from income

You need to deduct tax from employees who receive salary or wages - including student loan repayments, if they have them. Your employee needs to give you a completed Tax code declaration - IR330 so you know how much to deduct.

An employee may use a tailored tax code to help make sure they pay the right amount of tax.

You need to deduct tax from most contractors who receive schedular payments. Some contractors are exempt. The contractor needs to give you a completed Tax rate notification for contractors - IR330C so you know how much tax to deduct.

You need to pay the deductions to us.

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Deductions from salary and wages You deduct PAYE based on the tax code your employee has provided.
Employees with tailored tax codes A tailored tax code is a PAYE tax rate worked out to suit individual circumstances.
Taxing holiday pay Holiday pay is included as earnings in the period it is actually paid.
Taxing employee redundancy Redundancy payments are taxed at the lump sum rate and are not liable for ACC.
Taxing payments to an entertainer This guided help article helps you with your tax responsibilities when you're paying an entertainer.
Employer superannuation contribution tax (ESCT) You must deduct ESCT from your employer contributions to your employees' KiwiSaver.
Payroll giving Your employees can get tax credits for making donations to approved organisations through your payroll system. Making donations this way reduces their PAYE.
PAYE records You must keep records of all your PAYE deductions.
PAYE intermediaries PAYE intermediaries provide payroll services to employers.
Deduction notices collecting taxes from taxpayers who refuse to pay A deduction notice requires a third party that owes money to the taxpayer to pay the money to Inland Revenue instead.

Ngā tangohanga mai i ngā moni whiwhi Deductions from income

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Deductions from income