Is payroll giving you a headache this month?

A large number of employees are ending up with tax bills at the end of the financial year, and the IRD have taken deductions from their pay. This can be embarrassing for the employee as they were unaware they owed money. Employees can end up with a tax bill if they have not had enough tax deducted from their pay throughout the income year to meet their tax obligations. There are a number of reasons that employees end up with a hefty bill with the most common being extra pay not being taxed correctly. Extra pay could include bonuses, commissions and cashed-up leave.

Over the last few years, the disruption of Covid has led to some mistakes being made with employees' pay. And, where has that left some employees? Embarrassed, unhappy and with a large tax bill!

We’d like you to take a moment to think about the following if you are an employer.

• Are you up to date with the latest legislation and how it affects your payroll software?
• Is the software calculating the tax correctly so your employees are paid correctly?
• Do you know how to calculate tax on extra pay correctly?

It’s very important that your employees and yourself have a myIR account set up. It helps avoid scams and makes sure you’re on top of your tax and Kiwisaver accounts.

Some say New Zealand’s payroll legislation is one of the most complicated in the world and with even more complexities coming next year with the Holidays Act Review, and Fair Pay Agreements on the table. Understanding what's what now will ensure you have it right before further rules come in.

Make time to talk to one of our advisors today and make sure you’re paying your employees correctly.