Important Payroll Information
Tax Specification Changes - Effective 1st April 2011
1/ ACC Earners' Levy:
Maximum Income Threshold change from $110,018 to $111,669.
Maximum Annual Earner's Levy from $2,200.36 to $2,278.04.
2/ Non-Resident Seasonal Workers / Recognised Seasonal Workers Tax Rate (NSW) - Flat Percentage
Change from 15% to 10.5% (i.e. 0.15 to 0.105)
3/ Annual Income Calculation
Annual income calculation from pay period has been revised; calculate annual income from pay period:
|
Pay Frequency |
Multiply by |
|
Weekly |
52 |
|
Fortnightly |
26 |
|
Monthly |
12 |
|
Four Weekly |
13 |
DROP CENTS to truncate to whole dollar - no rounding required.
This change will only impact employees on tax codes of M, ML, M SL, ME and ME SL. It will also only impact employees who are on a monthly pay frequency.
4/ Child Support Deduction
Previous: Net Pay consists of Gross Pay - PAYE (include ACC Earner Levy)
New: Net Pay consists of Gross Pay - PAYE (exclude ACC Earner Levy)
5/ Changes to pay for school children
From 1 April 2011 children are entitled to a tax credit of $245.70 each year if the income is over $2,340. If the income is less than $2,340, generally the tax credit is 10.5% of the income. If a child has used the M tax code on the IR 330, reduce the PAYE to be deducted by $4.72 each week. School children under 18 do not qualify to use the ML tax code.
6/ Average Daily Pay (Holidays Amendment Act 2010)
Average daily pay is a new calculation to determine what an employee should be paid when it is not possible or practicable to determine an employee’s relevant daily pay; or the employee’s daily pay varies within the pay period when holiday or leave falls.
Calculating payment for Public Holiday, Alternative
Average Pay = (Gross Earnings for the 52 weeks before the end of the pay period immediately before calculations is made) / (number of whole or part days during which the employee earned those gross earnings, including any day on which the employee was on a paid holiday or paid leave but excluding any other day on which the employee did not actually work)
7/ Cash-Up - 4th Week of Annual Leave
As of 1st April 2011 it will now be possible for an employee to request a portion of Annual Leave to be cashed up to a maximum of one week’s worth of an employee’s entitlement. The employer and the employee must both agree. The payment value will no longer be considered part of the holiday earnings (or gross earnings as it is referred to in the Holidays Act 2003). A request for a portion of annual holidays to be paid out may only be made to an entitlement year that begins on or after the commencement of this Act (commencement date is 1st April 2011); this is referred to as transitional provision.
8/ Transferring Whole of Public
From the 1st April 2011 an employer and employee may agree in writing to transfer a public holiday as long as that public holiday is deemed to be a working day and it is being transferred to another working day of that employee.
End-Of-Year Tax Procedures 2011
End-of-year processing will generate Certificates of Earnings for each employee to show their Gross Taxable Earnings, PAYE etc. for the financial year. Any employees who wish to complete a tax return may need this information. In addition to the Certificate of Earnings, other useful year end reports available are: ACC Levy Report and YTD Summary Report. Please call the Answer Centre on 0800 856 856 if you need assistance activating these.
END-OF-YEAR PROCESSING
End of year processing for 2010/2011 will occur automatically during the first payrun that has a payday that falls in April 2011, with the direct credit release date determining when the payday occurs. The actual period-end date of a payrun does not influence this decision.
When a payrun is deemed to be the first for April 2011 all end-of-year processing for that company will be actioned as at the previous pay period.
EXAMPLES:
A payrun with a period-end date of 29th March 2011 is given a DC Date of 30th March 2011.
• The calculated payday is 31st March 2011.
• The payrun will be included as March in the 2010/2011 financial year.
• No End-of-year processing will take place.
A payrun with a period-end date of 29th March 2011 is given a DC Date of 31st March 2011
• The calculated payday is 1st April 2011.
• The payrun will be part of April with end-of-year reports printed prior to processing the pay details.
• This payroll will be the first of the new 2011/2012 financial year.
IT IS IMPORTANT THAT YOU ARE AWARE OF WHICH FINANCIAL YEAR A PAYRUN SHOULD BE INCLUDED.
If you require adjustments for the 2010/11 financial year and you have already run your last “live” payrun for that year, then the adjustments must be in a manual non-paying run:
Before the first payrun with an April payday, AND with a Direct Credit Date of 30 March 2011 or earlier.
The direct credit date of an adjustment run is critical as it must ensure that the calculated payday will fall in March, i.e. the DC Date must be the 30th March 2011 or earlier. If the DC Date of the adjustment run is 31st March or later, or if the adjustments are left until the next period, they will be included in the new financial year.