A. Update

Ministry of Business, Innovation and Employment (MBIE) of New Zealand has released an update stating that the drafting of the bill which will implement the Taskforce recommendations is in progress, will include some refinements which will be in consistent with the intent of such recommendations.

Also, MBIE have informed that the bill will not be introduced before the 2023 general election in New Zealand as they want to take the time to get the Bill right to minimize the risk of non-compliance issues and subsequent remediation processes.

B. Statutory Compliance Release Date: August 08, 2023

C. Effective Date: Not Applicable

A. Update

The rates set out below apply for the 2022-2023 income year for business motor vehicle expenditure claims.

The Tier 1 rate is a combination of vehicle's fixed and running costs and reflects an overall increase in vehicle running costs due to fuel prices. Tier 1 is used for the business portion of the first 14,000 kilometres travelled by the vehicle in a year. This includes private use travel as well.

The Tier 2 rate is for running costs only. It is used for the business portion of any travel over 14,000 kilometres in a year.

B. Statutory Compliance Release Date: May 11, 2023

C. Effective Date: May 11, 2023

A. Update

Inland Revenue Authority has released the Payroll Calculations & Business Rule specification wherein the following changes have been confirmed for the financial year 2023-2024.

1. Accident Compensation Corporation (ACC) earner levy

• The Accident Compensation Corporation (ACC) earners levy rate has changed from 1.46% to 1.53%.
• The maximum liable earnings limit for ACC earners levy has increased from NZ$ 136,544 to NZ$139,384. If the annual income is more than the maximum limit, then ACC earners levy will be NZ$ 2132.57.

2. Student loan deduction rates and thresholds.

The student loan repayment threshold has increased to $22,828 for the 2023/2024 tax year. The above threshold has been divided according to the pay-cycle frequency as per below table:

B. Statutory Compliance Release Date: December 20, 2022

C. Effective Date: April 01, 2023

A. Update

Inland Revenue Authority has released the draft version of Payroll Calculations & Business Rule specification wherein the following changes have been proposed for the financial year 2023-2024. Please note that these changes will remain in draft until the legislation is passed on or before March 2023:

• The Accident Compensation Corporation (ACC) earners levy rate has changed from 1.46% to 1.53%.
• The maximum liable earnings limit for ACC earners levy has increased from NZ$ 136,544 to NZ$139,384. If the annual income is more than the maximum limit, then ACC earners levy will be NZ$ 2132.57.
• Student loan deduction rates and thresholds will be released in December 2022.

B. Statutory Compliance Release Date: November 11, 2022

C. Effective Date: April 01, 2023

A. Update

It has been announced that Monday September 26, 2022 will be a one off National public holiday to mark the passing of Her Majesty The Queen. The normal Public Holiday requirements under the Holidays Act and entitlements will apply.

Shop trading restrictions will not apply on this public holiday. Shops may open and apply the normal rules for employees who work on a public holiday.

B. Statutory Compliance Release Date: September 13, 2022

C. Effective Date: September 26, 2022

B. Update

The rates set out below apply for the 2021-2022 income year for business motor vehicle expenditure claims.

The Tier 1 rate is a combination of vehicle's fixed and running costs and reflets an overall increased in vehicle running costs due to fuel prices. Tier 1 is used for the business portion of the first 14,000 kilometres travelled by the vehicle in a year. This includes private use travel as well.

The Tier 2 rate is for running costs only. It is used for the business portion of any travel over 14,000 kilometres in a year.

C. Statutory Compliance Release Date: May 27, 2022

D. Effective Date: May 27, 2022

B. Update

In Budget 2022, Inland Revenue Department (IRD) has announced a Cost-of-Living payment up to $350 which will be paid in 3 monthly payments of around $116. The first payment will be paid on August 01, 2022.

Individuals (or employees) who earned up to $70,000 during the previous financial year (April 01, 2021 to March 31, 2022) and also not eligible on Winter Energy Payment are eligible to receive Cost-of-Living payment.

In case if an Individual (or employee) qualifies for the payment, IRD will pay it directly in their bank account provided in myIR.

C. Statutory Compliance Release Date: May 19, 2022

D. Effective Date: August 01, 2022

A. Update

The Government has created a new public holiday for Aotearoa by passing the Te Ture mō te Hararei Tūmatanui o Te Kāhui o Matariki / Te Kāhui o Matariki Public Holiday Act.

Matariki is an abbreviation of ‘Ngā Mata o te Ariki Tāwhirimātea’ (‘The Eyes of the God Tāwhirimātea’) and refers to a large cluster of stars, also known as the Pleiades.

The Matariki Public Holiday Bill was only the fifth dual language Bill to be introduced to the New Zealand Parliament.

The first public holiday to celebrate Matariki will be on Friday 24 June 2022.

B. Statutory Compliance Release Date: April 12, 2022

C. Effective Date: June 24, 2022

A. Update

Three changes to KiwiSaver for employees and employers take effect on April 01,2022.

New ways to change KiwiSaver contribution rate:

• KiwiSaver members who make contributions through deductions from their salaries and wages have more ways to change their KiwiSaver contribution rate. It can be done either directly through the employers or through using myIR or contact their KiwiSaver scheme provider.
• If an employee changes their rate in myIR or through their KiwiSaver scheme provider, Inland Revenue (IR) will issue a notification to advise of the rate change.

Returning employer contributions

• If an employee has opted out of KiwiSaver or if there is an invalid/incorrect enrolment, any employer contributions will be offset against any amount outstanding, and the remaining balance will be refunded by IR.

Time-bar for employment information

• If it has been 4 years or more since the return was first filed, employers will no longer be able to change employment information through myIR or Gateway Services.

B. Statutory Compliance Release Date: March 31, 2022

C. Effective Date: April 01, 2022

A. Update

The following changes are being made to the Gateway Employment Service (Employee Details) ‘Create’ Operation to align it with myIR.

• ‘kiwiSaverStatus’ field is being made ‘Conditional’ from ‘Required’
• If ‘EmployeeKiwiSaverEligibility’ is NE (New Employee) then kiwiSaverStatus’ is required otherwise it will be optional
• New error code 146 – ‘KiwiSaver Status Required’ will be returned when eligibility is NE and Status is not supplied.
• Employment.v2.xsd. is being updated as follows:

  From: <xsd:element name="kiwiSaverStatus" type="KiwiSaverStatusType"/>

  To: <xsd:element name="kiwiSaverStatus" type="KiwiSaverStatusType" minOccurs="0"/>

B. Statutory Compliance Release Date: March 30, 2022

C. Effective Date: April 27, 2022

A. Update

The Government, Business New Zealand and the New Zealand Council of Trade Unions have proposed a new way of better protecting workers and the economy: a New Zealand Income Insurance Scheme.

This will support workers with 80% of their income for up to 7 months if they lose their job through no fault of their own. People will have the time and financial security to find a good job that matches their skills, needs and aspirations, or retrain for a new career.

Like ACC for accidents, the scheme will be funded by levies on wages and salaries, with both workers and employers contributing.

The key features of the proposed New Zealand Income Insurance Scheme are:

• Broad coverage for different working arrangements
• Coverage for job losses due to redundancy, layoffs and health conditions and disabilities
• A 4-week notice period and 4-week payment, at 80% of salary, from employers
• A further 6 months of financial support from the scheme, at 80% of wages or a salary
• Option to extend support for up to 12 months for training and rehabilitation
• A case management service to support people’s return to work
• Administered by ACC
• Funded by levies on wages and salaries, with both workers and employers paying an estimated 1.39% each
• Workers eligible after 6 months of levy contributions in the previous 18 months.

The scheme is only under consultation and currently open for public comments.

B. Statutory Compliance Release Date: February 02, 2022

C. Effective Date: To be announced

A. Update

• The prior period adjustment fields in the EI (‘Prior period gross adjustments’ and ‘Prior period PAYE adjustments’) will accept negative values. However, any negative amounts entered cannot be more than the corresponding amounts in the ‘Gross earnings and/or schedular payments’ field and ‘PAYE / tax’ field for the line item i.e., the line can be reduced to zero, but not below. (Effective date: October 28, 2021)
• A Tax code line record (TED) must be included when sending an employee details line record (DED). If a TED is not included, a validation error will be returned for the file. (Effective date: February 02, 2022)
• The “Total gross earnings” and “Gross earnings and/or schedular payments” in the Employment information (return filing) should not have the value of Employee share scheme payments. (Effective date: April 01, 2022)
• The “PAYE/tax” filed at employee level details cannot be greater than the sum of gross earnings and Employee share scheme. (Effective date: April 01, 2022)
• The Child support code shall be blank in case of no child support deduction applicable or if entire child support amount as per deduction notice is deducted. Further, in case more than one variation applies, there is a priority code (lowest number with highest priority) that shall be applied. (Effective date: April 01, 2022).

Following are the codes with priority:

B. Statutory Compliance Release Date: October 01, 2021 and December 22, 2021

C. Effective Date: October 28, 2021, February 02, 2022 and April 01, 2022

A. Update

The cabinet has passed the following changes for the financial year 2022-2023. Please note that these changes are subject to Order in council. This will happen before March 2022.

• The Accident Compensation Corporation (ACC) earners levy rate has changed from 1.39% to 1.46%. The maximum liable earnings limit for ACC earners levy has increased from NZ$ 130,911 to NZ$136,544. If the annual income is more than the maximum limit, then ACC earners levy is NZ$ 1,993.54.
• The student loan repayment threshold has changed for FY 2022-2023. Please refer to the below table for amounts:
  

  Pay-period	Amount (NZ$)
  Weekly threshold	$409
  Fortnightly threshold	$818
  Monthly threshold	$1,772.33
  Four-weekly threshold	$1,636

• There is a new option for calculating fringe benefit tax (FBT)
  For the 2021-22 and later income years, a new Pooled Alternate Rate option for calculating fringe benefit tax (FBT) is proposed. Under this proposed option, employers will pay FBT at the rate of 63.93% only for those employees with all-inclusive pay of $129,681 or more. FBT will be payable at the rate of 49.25% for all employees with all-inclusive pay under $129,681.
• The Secondary income and other income codes tax rates including ACC earners leavy have changed on account of change in ACC earners levy. Please refer the table below for updated rates:
  

  Tax codes	Rate (%)
  SB / SB SL	11.96
  S / SL	18.96
  SH / SH SL	31.46
  ST / ST SL	34.46
  SA / SA SL	40.46
  NSW	11.96
  EDW / CAE	18.96
  ND	46.46

• The Inland Revenue Child Support has a new Deduction notice (YL0010) which would provide details about all employees who have a change to their child support amount in the coming pay-period. For WT payers, the notice may specify a percentage of the net pay to be deducted. These deductions are paid directly to Inland revenue using the customer’s IRD number and tax type NCP. When using a percentage deduction, the maximum amount that can be requested by Inland Revenue is 40% of their net pay.

B. Statutory Compliance Release Date: December 22, 2021

C. Effective Date: April 01, 2022

A. Update

The Government has implemented support for Business following alert level changes in August 2021. Following are the supports available for Business after the announcement:

1. The Wage Subsidy Scheme (WSS)

This payment will be available nationally to help eligible businesses continue paying staff and protecting jobs. To reflect increased wage costs, the payments have been increased to $600 for full-time employees and to $359 for part-time employees. This will be open to applications from 9am on Friday 20 August 2021, with applications initially open for two weeks. Please refer the link for more details.

2. The Resurgence Support Payment (RSP)

This payment will be available to any business or organization in New Zealand that experiences at least a 30% drop in revenue or a 30% decline in capital-raising ability over a 7-day period, due to a COVID-19 alert level increase of level 2 or higher. This will be open to applications from 8am on Tuesday 24 August 2021 and will be available until one month after a nationwide return to Alert Level 1. Please refer the link for more details.

3. The Leave Support Scheme (LSS)

This payment provides a two-week lump sum payment of either $585.80 per week for full-time workers or $350 per week for part-time workers who must self-isolate and cannot work from home. The rates increase to either $600 per week for full-time workers or $359 per week for part-time workers from Tuesday 24 August 2021. Please refer the link for more details.

4. The Short-Term Absence Payment (STAP)

This payment provides a one-off (once per 30 days) payment of $350 for workers who must miss work due to a COVID-19 test and cannot work from home. The rate increases to $359 from Tuesday 24 August 2021. Please refer the link for more details.

5. The Small Business Cashflow Scheme (SBCS)

This scheme supports small to medium businesses and organizations struggling with a loss of actual revenue due to COVID-19. Applications are open until 31 December 2023. Please refer the link for more details.

6. Tax return Filing, Payments and Interest and Penalties

Filing returns ensures information about your businesses is up-to-date and accurate. It will help support any applications for the Government’s COVID-19 relief packages. Please refer the link for Tax filing matters during current levels.

Businesses that have an amount to pay can set up a repayment plan to pay it over time. This can be for amounts due now or later.

If COVID-19 has impacted your business’s ability to pay tax on time, a request can be submitted for remission of penalties and interest through myIR.

B. Statutory Compliance Release Date: August 19, 2021

C. Effective Date: August 17, 2021

A. Update

In accordance with s DE 12(4) the Commissioner is required to set and publish kilometre rates. These rates can be used to calculate expenditure claims for the business use of a motor vehicle. They may also be used by employers as a reasonable estimate for reimbursement of expenditure incurred by employees for the use of a private motor vehicle for business purposes.

The table of rates for the 2021 income year:

The Tier Two rate is for running costs only. Use the Tier Two rate for the business portion of any travel over 14,000 kms in a year.

B. Statutory Compliance Release Date: May 27, 2021

C. Effective Date: April 01, 2021.

A. Update

The Parliament has passed the Holidays (Increasing Sick Leave) Amendment Bill to increase the minimum employee sick leave entitlement from 5 days to 10 days per year.

Most employees who have worked for an employer for six months or over are entitled to sick leave if they, or a dependent, are sick or injured. Currently, employees are entitled to 5 days of sick leave per year; however, from 24 July 2021 this will increase to 10 days per year.

Employees will get the extra five days when they reach their next entitlement date – either after reaching 6 months’ employment or on their sick leave entitlement anniversary (12 months after they were last entitled to sick leave).

Employees who already get 10 or more sick days a year will not be affected by this change.

The maximum amount of unused sick leave that an employee can be entitled to will remain 20 days.

B. Statutory Compliance Release Date: May 27, 2021

C. Effective Date: July 24, 2021

A. Update

The law change allows an employee to take up to three days’ paid bereavement leave if they or their partner experiences a miscarriage or stillbirth. People planning to have a child through surrogacy or adoption are also eligible, if the pregnancy ends by miscarriage or stillbirth.

Bereavement leave gives an employee time to grieve and to take care of matters to do with the bereavement. This can be taken at any time and for any purpose relating to the death, miscarriage or stillbirth, and does not have to be taken straight away or on consecutive days.

The existing rules on bereavement continue to apply. Employees become eligible for bereavement leave after six months.

Employees are not required to produce proof of pregnancy, miscarriage or stillbirth.

The law change does not provide bereavement leave for terminations. Depending on the circumstances, mothers may be eligible to use sick leave following a termination.

The law change is expected to take effect in the coming days, following Royal Assent.

B. Statutory Compliance Release Date: March 25, 2021

C. Effective Date: To be announced

A. Update

The Government established the Holidays Act Taskforce to suggest improvements to the Holidays Act, following a joint request from unions and employers. The Taskforce was asked to make recommendations on options for a clear and transparent set of rules for providing entitlements to, and payment for, holidays and leave.

The Taskforce made 22 recommendations which were jointly agreed to by union and business representatives. The Government has accepted the Holidays Act Taskforce’s recommendations.

The Taskforce’s changes will address the high degree of ambiguity that has made the Holidays Act difficult to understand and implement for employers. Employees will find it easier to understand their entitlements and will also benefit from some changes to leave entitlements.

Highlights of the Proposed Changes are as follows:

The Holidays Act is highly complex, and affects all employees and employers across the country. The Government has begun further detailed policy design work to implement these changes. The Government expects to have introduced legislation by early 2022, which will go through the full parliamentary process. Businesses and employers will be given plenty of time and guidance to prepare for these changes.

B. Statutory Compliance Release Date: February 23, 2021

C. Effective Date: To be Announced 

A. Update

1. Tax Threshold and new rate change

With the enactment of the Taxation (Income Tax Rate and Other Amendments) Act 2020 a new top personal income tax rate of 39% applies for FY 2021–22 and later income years on annual personal income that exceeds $180,000, as well as changes to ensure that the new rate applies consistently across other personal tax system. The New tax codes are as follows:

Following are the changes in the Old tax codes:

• a) ST - Secondary income * $70,001 to $180,000. Change in Threshold limit.
• b) ST SL - Secondary income * $70,001 to $180,000 with student Loan. Change in Threshold Limit.
• c) M, M SL, ME, ME SL - If annual income is between $70,001 and $180,000 inclusive, multiply annual income by 33% and subtract $9,080 and If annual income is greater than $180,000 multiply annual income by 39% and subtract $19,880.
• d) Extra pay (Lump Sum) - Primary Income and Secondary Income - The Employee can elect a higher rate to be deducted at the rate of 39% now. Refer table above for thresholds.
• e) Three tax codes have been removed - SLCIR, SLBOR and ESS. This is now shown separately in the Employee and return filing details.

2. Student loan deduction rates and thresholds.

The student loan repayment threshold has increased to $20,280 for the 2021/22 tax year.

The maximum rate will be 5% on gross income (over the pay period repayment threshold) for primary employment earnings.

For secondary income this will be 5% on the gross payment of salary or wages.

3. There is a change in the Employer Superannuation Contribution Tax (ESCT) rate and threshold amounts:

4. Pay-day Filing

• From April 01, 2021 - the Employee Details file format with the header record indicator of HED will no longer be accepted.
• For files with a payday of April 01, 2021or later, the Employment Information file format with the header record indicator of HEI will not be accepted. The updated version of the Employment Information file format (header record indicator HEI2) must be used.
• From April 01, 2021, the KiwiSaver Employment Details (KS1) form will no longer be Older version reports can be amended only using the older version.accepted. All details previously provided via this form should now be provided by using the HED2 version of the Employee Details file. The KED form is also no longer available for use.
• Older version reports can be amended only using the older version.

B. Statutory Compliance Release Date: December 07, 2020

C. Effective Date: April 01, 2021

A. Update

There is a change in Kilometer rate claim amount based on Tier 1 and Tier 2 from financial year 2019-2020 onwards.

If the return has already been filed ( FY 2019-2020) employee / employer can contact IRD for reassessment.

B. Statutory Compliance Release Date: December 10, 2020

C. Effective Date: April 01, 2019

A. Update

• Keeping in Touch days for employees have increased from 52 hours to 64 hours over the duration of their paid parental leave.
• The duration of primary carers leave has increased from 22 weeks to 26 weeks.

B. Statutory Compliance Release Date: July 01, 2020

C. Effective Date: July 01, 2020

A. Update

Following are the highlights of the wage subsidy for COVID 19:

Eligibility

• a. All New Zealand employers who have been adversely affected by COVID-19 shall be eligible provided they qualify the below criteria:
  - business is registered and operating in New Zealand
  - Employees are legally working in New Zealand, including employees who:
• have a NZ work visa
• have a condition on their NZ temporary visa that allows them to work in NZ
• are international students whose visa allows them to work in NZ
• b. Business has experienced a minimum 30% decline, as per method prescribed by the authorities, and that decline should be related to COVID-19
• c. Business has taken active steps to mitigate the impact of COVID-19.

Application process

• a. Employer to apply for subsidy for employees by providing information as required by the IRD
• b. Must retain the employees named in your application for the period of the subsidy.

Amount of Subsidy

• a. The COVID-19 Wage Subsidy will be paid at a flat rate of:
  - $585.80 for people working 20 hours or more per week (full-time rate)
  - $350.00 for people working less than 20 hours per week (part-time rate).
  - The subsidy is paid as a lump sum and covers 12 weeks per employee.
  - If you work variable hours (or your employee does), you can use an average to work out what rate to apply for.
  • Use the average hours worked each week:
    • over the last 12 months, or
    • over the period of time you (or they) have been employed (if it's less than 12 months).
  • If the average hours are:
    • 20 or more, apply for the full-time rate
    • Less than 20, apply for the part-time rate.

Payment to Employees

• a. Employers receiving the wage subsidy should pay to such employees, named in the application, at least 80% of their usual wages or at least the subsidy rate (i.e. full-time or part-time).
• b. If your employee's usual wages are less than the subsidy, then usual wages to be paid to them.

Impact on Employees’ PAYE

• a. Your employee will need to pay tax on their wage subsidy payment as it’s paid to them as part of their normal wages. This means it’s subject to the usual employer deductions, eg, PAYE, Student Loan, KiwiSaver, Child Support etc.
• b. When calculating PAYE deductions, do not gross up the Wage Subsidy component. PAYE is deducted from the subsidy (i.e. $585.50 less PAYE, etc).
• c. You can agree with your employee the frequency at which the subsidy is paid. However, if the subsidy is being paid outside of their usual pay cycle this might have adverse tax implications for your employees such as:
  • they may be taxed at the wrong rate
  • it may impact Working for Families entitlements.

B. Statutory Compliance Release Date: March 17, 2020

C. Effective Date: March 17, 2020

A. Update

Income-tax changes

• a) The ACC Earner's levy has increased from $ 1,28,470 to $1,30,911 for Employees and private domestic workers (Work and Earners’ Accounts) and self-employed people (Work and Earner’s Accounts).
• b) The maximum ACC Earner’s levy above $ 1,30,911 has been increased to $ 1,819.66.
• c) Student loan repayment threshold has been increased to $ 20,020 from $ 19,760.
• d) The student loan deduction threshold has increased as follows: weekly ($ 385), fortnightly ($ 770), monthly ($ 1,668.33) and 4-week period ($ 1,540).

Other Matters

• 1. For deductions from salary as per section 157 notice, below changes have been introduced:
  • a. 10% of the amount owing as specified in the section 157 notice or
  • b. 20% of gross pay (as calculated by the employer) or higher amount as per employee.
• 2. For payment of salary, validation file has been added for China Construction Bank.

B. Statutory Compliance Release Date: December 13, 2019

C. Effective Date: April 01, 2020

A. Update

1. New Employee Details (ED) File specifications

New Employee Details csv file, which include new fields for KiwiSaver eligibility, employee exempt income, KiwiSaver opt-out information and new KiwiSaver statuses.

The previous version of the ED csv file may still be used for reporting of employee details for now, however only the new version of the file will be accepted from April 01, 2021.

The new version of the Excel ED file to be used from the R4 will release in April 2020.

2. New EI and EIA file specifications

These files include new fields such as hours paid and prior period adjustments, and new fields for SLCIR, SLBOR and ESS deductions.

The previous versions of the files may still be used for reporting of payday information for now, however only the new versions of the files will be accepted from April 01, 2021.

3. Removal of Electronic Payment Schedule

As of the R4 release in April 2020, the Electronic Payment Schedule (EPS) file upload service will no longer be available.

PAYE intermediaries to use the Multi-payment option account (MPO) in order to process electronic payment schedules on behalf of their clients.

4. Removal of IR345

As of April 01, 2020, the Employer Deductions form (IR345) will no longer be available for filing.

5. Removal of PAYE Intermediaries Payroll Subsidy

The payroll subsidy, that some PAYE intermediaries have been able to apply for, will no longer be available from April 01, 2020.

6. Intermediaries must be linked to clients

As of April 01, 2020, all files submitted by intermediaries through the Tax Preparer tab will require a link to the client listed in the file for the file to be accepted and processed.

B. Statutory Compliance Release Date: December 13, 2019

C. Effective Date: April 01, 2020