All payments must be made on termination

Employees must be paid when they terminate (or in the next normal payrun) all wages, holiday pay or money outstanding as per the Wages Protection Act 1983.

An Employer may not deduct any money without the employees consent .This  should be stated in the employees contract and signed by both parties.

In Lieu of Notice Payments

In Lieu of  Notice payments  can be paid to an employee if the employer requests the employee to leave immediately once notice has been given.  The number of weeks to be paid is specified in the employment contract which should have been signed by both parties.

Conversely, the employer may make deductions from the employees final pay if the employee defaults on the agreed notice period (provided that is permitted by the employment agreement)

In Lieu of  Notice payments attract the following on Termination:

-  Holiday Pay of 8%

-  KiwiSaver Contribution if a member

- ACC Levy of 1.7%

When terminating , the in lieu of notice payment is taxed as an extra pay.  The PAYE is calculated by taking the lump sum payment and the grossed up annual value of the employee’s income for the previous four weeks (multiply this by 13 to get the annual gross) then taxed at the appropriate rate as per the IRD.

Student Loans – 10% bonus

Early repayments of $500 or more in any tax year off a student loan will earn a 10% bonus.

In some cases it may be worth accepting the offer.  However, don’t overlook the time value of the money.

Redundancy Rebate

There is a special rebate for redundancy payments of 6 cents in the dollar. If you have to make any of your staff redundant, remind them they can complete form IR524, immediately, and may get a rebate of some tax, depending on the rate they pay and the total pay-out.

Tax Rates in New Zealand

The PAYE for primary employment is

-  14.2 % on income up to $14,000, plus

- 22.7% on income over $14,000 up to $48,000, plus

- 34.7% on income over $48,000 up to $70,000, plus

- 39.7% on income over $70,000 up to $106,473.

Income over $106,473 is taxed at 38% as this is the maximum liable for ACC earners’ levy of 1.7%.

Holiday in Crete

I have just returned from four glorious weeks in Crete, Turkey and Dubai and I have to say it has been difficult adjusting to the cold temperatures back here in Christchurch.

While I was away the  temperatures ranged from 30 to as high as 45 degress and everyday was just the same – HOT! The food in Crete was fantastic and very cheap, each night we dined at a different taverna and averaged twelve Euros per head including wine ( the local but still drinkable)

We then ventured to Turkey and spent 7  days on a Gulet which is a traditional Turkish sailing boat, sailing up and down the coast stopping at various coves.  It was a very relaxing trip with nothing to do but swim off the boat in warm and clear water, sun yourself on the deck,  and eat and drink – what more could you ask for.

After the Gulet we drove up to Istanbul via Gallipoli, a very moving experience for Kiwis as it makes you appreciate the sacrifice people have made for their country. We finished with three days in Dubai,  one of the shopping malls had an indoor skifield – talk about over the top.  Have to say the shopping was fantastic though.

Will you get money back?

Inland Revenue are currently running a campaign to encourage tax payers to find out if they are entitled to a Tax Refund.

There are a number of companies that can do this for you but they will charge a fee, whereas the IRD service is anonymous and FREE.

To find out more click HERE

The role of an effective Payroll Bureau

Every now and then, you might ask yourself what things you can do to streamline some of the operations of your business. Whether this means cutting back on some of the things that you do personally or simply finding a job in the office that can be outsourced to cut costs and reduce the time consumption of your employees, you are probably unsure where to start looking or what departments to select.

One of the most common ways that small and medium business owners are able to free up some of their own time though is by hiring an outside Payroll Bureau. The reason is simple. Most small business owners only have 5-10 employees at the most. However, it can take up to 15 or 20 hours a week to manage and sort through payroll paperwork for those employees, especially if you do not know what you are doing. However, a payroll bureau is practiced and skilled at handling your payroll, and for such a small business usually offers a great rate.

What You’ll Get

  • From a payroll bureau, you don’t just get a little extra time back; you get the peace of mind knowing that your payroll is being done properly without any snafus or problems that might crop up if you tried to stumble through it on your own. For example, you will get:
  • Assurance that payments are made on time – You may try hard, but what if you have something come up the day before payday. Can your employees afford for you not to have their checks ready?
  • The Expertise of a Payroll Bureau – Payroll Bureaus are skilled and practiced at what they do. They know all the tax laws, keep up to date with any changes and keep meticulous records.
  • Your Own Sets of Records – A good Payroll Bureau will provide regular updates of records for you that ensure you always have important financial information on hand if anyone needs.
  • Streamlined Paperwork and Tax Prep – It’s a time consuming process and often times nerve racking to try and figure out the taxes and paperwork of your employees on your own. So, having a company that can do it with experience and a set process saves you a lot of worry.

Ultimately, as you can see, a payroll bureau ensures that everything gets taken care of as it should be – on time, in good order and with the right rules in mind.

If you’re looking for a way to cut back some expenses and save a little time in your schedule or the schedule of someone that works for you, one of the best ways available is to hire a payroll bureau that can effectively track hours and payments, write checks, provide paperwork, and keep detailed, organized records for the future.

All of these things are well worth the small fees they charge and if you consider how much of your own time they will save, it’s beyond being worth it.