NZ Payroll Community

If you are interested in seeing what the Payroll Software developers use to keep their products up to date in respect to Legislative changes then follow the link below.

http://www.ird.govt.nz/software-developers/software-dev-specs/software-dev-specs-index.html#payroll

KiwiSaver members who qualify for the first home deposit subsidy will not be taxed on the subsidy, Revenue Minister Peter Dunne has announced.

“Changes made to the tax rules by Order in Council this week allow the deposit subsidy to be treated as a social assistance suspensory loan.

“Provided recipients meet all conditions and live in the home for at least six months, there will be no requirement to repay the loan. Normally the tax rules would treat such ‘forgiven’ debts such as income, which would be taxable.

“Changing the tax rules to treat the subsidy as a social assistance suspensory loan will be good news for the recipients of the subsidy when it becomes available on 1 July,” Mr Dunne said.

KiwiSavers who have contributed to the scheme for a minimum three years and who are looking to buy their first home, but who have difficulty raising the deposit may be eligible for the deposit subsidy.

KiwiSavers who are not first-home owners, but are also having difficulty saving for a deposit on a home may also be eligible for the subsidy.

The subsidy provides for $1000 for each year of contribution, up to a maximum of $5000 and is administered by the Housing New Zealand Corporation.

The rule change making the first home deposit subsidy a social assistance suspensory loan for tax purposes was made by Order in Council on Monday 26 April.

Source: http://www.taxpolicy.ird.govt.nz/news/2010-04-29-no-tax-kiwisaver-first-home-subsidy

Minimum Wage – From 1st April 2009
There are three groups to calculate minimum wages for. These are the ‘Adult Minimum Wage’, ‘New Entrant’s Minimum Wage’ and ‘Training Minimum Wage’.

Adult Minimum Wage
This applies to all workers who are 16 years old and over who are not new entrants or trainees. The adult minimum wage increases from $12.50 per hour to $12.75 from April 1st 2010.

New Entrant’s Minimum Wage
This applies to employees aged 16 or 17 years who have completed fewer than 200 hours or 3 months of employment, whichever is shorter and who are not supervising or training other workers. An employee will not be a new entrant if they are a trainee who is subject to a training minimum wage. The new entrant’s minimum wage is increasing from $10.00 per hour to $10.20 from April 1st 2010.

Training Minimum Wage
This applies to employees aged 16 or over who are required by their employment agreements to undertake at least 60 credits a year of a recognized industry training programme. The training minimum wage is also increasing from $10.00 per hour to $10.20 effective from April 1st 2010.

Additional Information Regarding Minimum Wage

There is no set rate for employees under 16 years old.
The rates are gross before tax.
Holiday pay must be paid in addition to the minimum wage.

There are serious ramifications for breaches of Minimum Wage requirements (and holiday pay) and Labour Inspectors (Labour Department) have the power to issue demand notices if:

• An employee complains and the Inspector believes the employee has not received wages or holiday pay;
• Where the employer has been given a 7 day notice to comment on the complaint and the Inspector is satisfied the employee is entitled to the wages or holiday pay.

Labour Inspectors can enter the employer’s premises under the provisions of the Act, interview people and require copies of wages, time and holiday records.

Employers who fail to comply with any ‘requirements’ of Inspectors face penalties under the Act.

For further information, please refer to www.ers.govt.nz/pay/minimum.html

See attached…

Software Developers News December 2009

The IRD has released the latest draft specification document for the next tax year.

You can view the document by clicking HERE and then selecting “Draft Payroll Specification”.

Unknown to many people are a group called the  Software Development Liaison Unit within the IRD.

Their job is to work with software developers in scoping and implementing new legislation into the various payroll software packages available.

You can view their current Newsletter below.

Software Developers News November2009

Cabinet has given the go-ahead to proceed with legislation to simplify the administration of student loan repayments, Revenue Minister Peter Dunne announced today.

The impact of the proposed changes on borrowers was the subject of extensive consultation in June, in which people’s views were sought through an online forum and written responses to a government discussion document.

“As a result of hearing a wide range of views, the government has modified one of the main proposals that were presented for consultation a couple of months ago,” Mr Dunne said.

“The most controversial change in the original proposals was to deduct loan repayments from students’ holiday pay if they earned over $367 a week. Everyone disliked that one – emphatically, and it has now been rejected, which demonstrates that the government does listen.

“Instead, full-time students who earn below $19,084 a year will not have to make student loan repayments while they are studying,” Mr Dunne said.

“Nearly everyone agreed with the idea of Inland Revenue moving away from paper-based management of student loan repayments, towards electronic management and communication. That was, in the words of one respondent, a ‘no brainer’.

“Borrowers living overseas were particularly keen on having enhanced online services available at any time and from anywhere in the world.

Other main features of the reform are:

• Borrowers who live in New Zealand and whose income is virtually all from salary and wages will have their repayments deducted from their pay, on a weekly or fortnightly basis, through the PAYE system. For these borrowers there will be no more end-of-year assessments and square-ups.
• For all borrowers, the late payment penalty, equivalent to 19.56% a year, will be replaced with a late payment interest rate of 10.8% a year for borrowers based overseas, and 6.8% for those living here.
• There will be less administrative focus on minor over-deductions and under-deductions, to reduce both compliance costs and administrative costs.
• Borrowers who receive interest, dividends and Maori authority distributions of less than $1500 a year will not have to make repayments on that income.
• Student loan penalties will be aligned with income tax penalties for greater consistency.

“The changes will be incorporated into a bill to be introduced later this year and are expected to apply from 1 April 2011,” Mr Dunne said.

The following legislation has just been passed.

Employer payments and allowances: The law has been clarified to ensure employer payments for relocation and overtime meal allowances are tax-free, thus removing long-standing uncertainty in the law and saving time and money for everyone involved.

The Government has just passed legislation allowing for Payroll Giving.

“The eagerly awaited payroll giving scheme for charitable donations, which will operate through the tax PAYE system, will come into being three months from the date the new legislation receives Royal assent, which probably means before Christmas. Under the scheme, people whose employers sign up for the scheme will receive the tax benefits of their donations each payday, without having to present donation receipts”.

“The new legislation also makes life easier for volunteers and community groups by clarifying the tax treatment of reimbursements and honoraria, to make it easier for volunteers to meet their tax obligations and reduce the associated compliance costs. Those changes will apply from 1 April 2009″

The latest newsletter from the IRD that goes out to all registered Software Developers.  Articles in this issue:

• Software Developer Liaison Unit (SDLU)
• Turning off the printed IR345
• Integration of Ir-File with payroll products
• Payroll specification
• The “Big Bill”
• Payroll Giving
• Victoria University Tax Working Group
• Keeping your finger on the pulse
• Upgrade of info for software developers
• E-File Developers Strategic Forum
• Transform IR
• eGST Project
• Implementing Standard Business Reporting in New Zealand

Software Developers – Newsletter- Sept 2009