Important Payroll Information
Tax Changes October 2010
From 1 October 2010, the following Tax changes come into effect:
-
New Secondary Tax Code
-
A New Rate of Earner Premium
-
Change in the Maximum Leviable Amount for Earner Premiums
-
Change in Employer Superannuation Contribution Tax (ESCT)
new Tax Rates
The rates for income thresholds will change which will result in tax cuts for all tax codes. Below is a table with the new rates and threshold amounts. This means that PAYE is likely to change for most pays. However, the way in which PAYE is calculated will not change.
|
Income Thresholds |
Rate |
|
$1 - $14,000 |
10.5% |
|
$14,001 - $48,000 |
17.5% |
|
$48,001 - $70,000 |
30% |
|
$70,001 and above |
33% |
Acc Earner Levy changes
The earners levy deduction, for the year commencing 1st October 2010 will change from 2.0% to 2.04%. This change will be reflected in the PAYE calculations.
The maximum ACC income threshold will remain the same ($110,018). However, the maximum earner’s levy will increase from $2,200.36 to $2,244.36.
Employer superannuation contribution tax (ESCT)
In short, the rates and thresholds for employer superannuation contribution tax (ESCT) will change. You will need to use the new rates and threshold amounts to determine how much tax to withhold on employer superannuation contributions.
|
Income Thresholds |
Rate |
|
$0 - $16,800 |
10.5% |
|
$16,001 - $57,600 |
17.5% |
|
$57,601 - $84,000 |
30% |
|
$84,001 and above |
33% |
These changes will only come into effect once a “Period End Date” falls on or after 1st October 2010.
Acc Earner Levy changes
The earners levy deduction, for the year commencing 1st April 2010 will change from 1.7% to 2.0%. This change will be reflected in the PAYE calculations.
The ACC maximum leviable earnings increase from $106,473 to $110,018 pa. You may need to change this value if you have a General Ledger interface created with the payroll.
In DataPay the rate used to calculate ESCT will be based on the employee’s gross taxable earnings plus the value of the employer contribution for the last financial year (2009-2010 for example, if paying now in the 2010-2011 year). You do not need to do anything as the system will calculate the correct rate based on these earnings. Where there is not a complete year’s earnings, the calculation will be based on the grossed up earnings. For new employees added after 1 October, the rate will be based on the grossed up earnings for the first pay. Should you need to override this rate, please phone the Answer Centre or refer to DataHelp for assistance to do this.
In People Manager or People Connect you will need to contact the Answer Centre if you are currently holding individual rates against your employees and would like us to recalculate these based on the 2009-2010 relevant earnings, using the new rates. If you do not currently hold rates against individual employees the rate will default to 33%. You may want to contact the Answer Centre to get the new rates calculated and loaded for your employees. If your employee numbers are manageable you can load the new rates by going to the Employee Details 1 screen for each of your employees and specifying the relevant rate. Note that in People Manager or People Connect, the field holding the ESCT rate is limited to 2 characters. Because of this, enter 13 for 12.5% and 18 for 17.5%.
Allowances in the payroll used to pay GST
If you have an allowance set up in your payroll system that you use for paying GST you will need to change the value from 12.50 to 15.00 to allow for the increase in GST.
If you require any assistance please contact the Datacom Answer Centre on Ph 0800 856 856 between 8:30am and 5:30pm Monday - Friday, where one of our Consultants will be pleased to help.