Newsletter – March 2012
Autumn 2012
Welcome to our Autumn Newsletter. In this issue, we will cover the changes that will affect all employers and employees from 1 April 2012. Please feel free to contact any of our team for more details.
|
Summary of Key Changes Kiwisaver Changes – Members Tax Credit and Employers Contributions New Adult Minimum Wage Increases to $13.50 an hour ACC Earner Levy Changes Student Loan Scheme – changes to codes and additional tax codes |
KIWISAVER
Member Tax Credit
The member tax credit (MTC) is to be halved for the next MTC year (ending 30 June 2012). Government will now contribute 50c for each $1 contributed by individual Kiwisaver members, to a maximum of $521.43 a year.
Employers Superannuation Contribution Tax
ESCT (employer superannuation contribution tax) is a tax paid on employer cash Kiwisaver contributions.
Removal of the 2% ESCT exemption
Currently the first 2% of an employer’s contribution to their employee’s KiwiSaver or complying fund is exempt from ESCT so long as it was no more than 2% of the employee’s gross salary or wage.
From 1 April 2012 the 2% ESCT exemption will be removed. This means that from 1 April 2012 the entire employer contribution will be liable for ESCT.
The rate will be equal to an employee’s marginal tax rate, which means employees will receive less employer contributions into their Kiwisaver fund than in the past.
Employers will not have to pay more than currently, but some will go to the IRD.
ESCT Calculation Options
- ESCT can be calculated using a progressive table as below:-
| Income | ESCT Rate |
| 0 – $16,800 | 10.5% |
| $16,801 – $57,600 | 17.5% |
| $57,601 -$84,000 | 30% |
| $84,001 + | 33% |
- Employers can treat their employer contribution as salary or wages with the agreement of the employee.
The ESCT rate threshold is set at the beginning
of the tax year and cannot change until the following year when the rate is re-calculated.
Time will be incurred at the beginning of each tax year calculating the appropriate ESCT rate.
ACC Levy Changes
From 1 April 2012 the earner levy will drop from $2.04 per $100 to $1.70 per $100 (1.7%).
This levy is for the purpose of funding the cost of non-work related injuries.
New minimum wage rates take effect from 1 April 2012.
| Present rate | New Rate from 1 April 2012 | Daily Rate
8 Hours |
Week Rate
40 Hours |
Annually | |
| Adults
|
$13.00 an hour | $13.50 an hour | $108 a 8 hour day | $540 a 40 hour week | $28,080 a year |
| New Entrants
16-17 |
$10.40 an hour | $10.80 an hour | $86.40 a 8 hour day | $432 a 40 hour week | N/A |
Student Loan Scheme Changes
All borrowers are required to have a student loan (SL) repayment code regardless of whether their income is under the annual repayment threshold of $19,084.
New Tax Codes
Currently borrowers who use the SB or ML tax code do not have repayment deductions due to being below the annual threshold. From 1 April 2012, borrowers who wish to continue using the SB or ML tax code rate must use SBSL or MLSL unless they have provided their employer with a repayment deduction exemption certificate.
New Student Loan Repayment Codes
SLBOR – A code for additional deductions from salary and wages that borrowers have chosen to make to repay their loan faster.
SLCIR – This code is used when the IRD decide to recover a significant under-deduction.
IMS Payroll End of Year Procedures
In addition to the standard end of year reports that you save, we would also recommend saving the following reports in PDF format:-
Total Leave Report – Termination Value Selected
Annual Leave Report – Accumulator Option
Company Payroll Summary
|
ABM Document Scanning Module Reduce Unproductive time and Safeguard your Documents ABM Document Scanning Module allows you to add attachments to a customer, supplier, product or a transaction. Designs, photos, emails etc. can be attached (drag and drop) and viewed without the need to pull out a manual file. Unproductive time you and your staff spend looking for and through files to locate the information you need can be a thing of the past. Also a good risk management tool as a manual document can be lost in a disaster or just mislaid. Call Debbie for more information.
|
Easter Opening Hours
We will be closed on Friday 5 April and will reopen on Wednesday 11 April.
ABM TIP – Back to Back Orders
Did you know that ABM can automatically create purchase orders when a customer orders an item not in stock?
When the item arrives in, you are then prompted to complete the sale transaction.
Contact Ron or Jill for more information.
Phone 03 211 2589 Fax 03 218 3408
Level 2, 137 Spey Street, Invercargill
If you have any issues you need to discuss please give us a call.
Testimonial
“I was concerned when changing from a payroll system that I knew so well to a new one. I needn’t have worried, the team at Strategic were able to recommend, install and train me on a new system that gave me improved reporting and helped with budgets. They made it easy and hassle free. I use Strategic Software for ongoing support as what could take me 5 hours takes them 5 minutes and I am confident with the result.”
E. Hayes & Sons Limited
