Require Guidance To Interpret Your Report?

Require Guidance to Interpret Your Reports?

Datacom Employer Services has recently released the new “DataPay Report Interpretation Guide”. We hope this guide will aid you in understanding the payroll reports and enable you to obtain the most information possible from them.

It is important to note that the company used to generate these reports is fictitious and purely a test. Please disregard the actual figures in the guide; it is the format of the reports that is important. Our aim is for you to become more familiar with them.

In our monthly Respondent we will look at the most commonly used reports, and feature on a different one each month.

“Error and Warnings Report”

The Error and Warnings Report provides three types of messages: Errors, Warnings and Information.

• Error messages require immediate action in order for the payroll to be processed. Please contact your consultant to address this issue.

• Warning messages often indicate that an entitlement threshold has been exceeded (e.g. worked more hours than normal, exceeded annual leave balance) or a balance is negative or zero (e.g. employee not paid, deduction not taken). These threshold levels may be amended by your consultant if required. Please contact your consultant if you notice any unexpected warnings.

• Information messages mostly report on leave taken, and new or terminated employees. These messages are for your information only and no action is required.

This report can be sorted by employee surname (default), employee code, source, or message type. It can be grouped and filtered by costing (division, cost centre, or department), and with page breaks between costing, if required.

a) Company name, pay group or frequency, pay run type (main or manual), and period end date

b) Printing date and time stamp

c) Message type: Error, Warning, or Information

Compulsory Tax Law Change – Will You Be Effected?

New Secondary Tax Rate means new calculations

A new, low secondary tax rate of 12.5% and new calculations for extra pays/lump-sum payments are being introduced from 1 April 2010. Ensure that you check your payroll system beforehand to make sure it’s up to date.

There’s a new, low secondary tax code (SB) for individuals who want to apply the 12.5% rate to their secondary income. The new tax code can be used by individuals who expect their total income from all sources to be less than $14,000 for the year.

Do You Hold More Than One Job?

If you have more than one job, and expect your total income from all sources to be less than $14,000 for the year, you’ll be able to use a new low secondary tax code from 1 April 2010. This will mean you won’t pay more tax during the year than you need to.

You’ll be able to change your tax code by completing a Tax Code Declaration Form (IR330) and giving it to your employer. You can get a form from your employer or download one – from the IRD website listed here: http://www.ird.govt.nz/resources/

If your annual income from all sources is over the threshold for the code you’ve used, you may end up with a tax bill, because you’ll have been taxed at the wrong rate.

Changes for Employers

Any employees with more than one job may want to choose the new low tax code. There is also a new calculation for paying lump sum payments that applies to all secondary employees. You’ll need to start using the new rate and tax code to calculate the correct amount of PAYE to deduct from employees’ salary and wages for pay periods ending on or after 1 April 2010.

New Calculations for Extra Pays for Employees on Secondary Incomes

Employees using the tax codes S, SH and ST will pay more tax on one off payments such as bonuses as a result of the new calculations. Employees using the new secondary tax code SB are not affected by the new method. In short, the new calculation requires the low limit of the threshold for each code to be added to the annualised earnings, the new figure is then applied to tax tables to find the tax rate for the extra pay.

Example:

• Employee uses Tax Code SH, threshold is $48,001 - $70,000

• Employee receives bonus of $2,000

• 4 weekly pay is $4,000

Annualised Earnings = $4,000 x 13 + Bonus = $54,000

New Method requires $48,001 to be added to annualised earnings giving $102,001

*Tax Rate being based on $102,001 is now 38% rather than 33%

For more information on the new tax code visit: http://www.ird.govt.nz

Are you breaking the law?

Legal minimum wage is changing

As of 1 April 2010 the minimum wage for employees aged 16 years and over, except for new entrants and trainees, will be $12.75 an hour before tax. That’s $102 for an eight hour day, or $510 for a 40 hour week.

The training minimum wage and new entrant’s minimum wage will be $10.20 an hour before tax. That’s $81.60 for an eight hour day, and $408 for a 40 hour week. The training minimum wage applies to people doing recognised industry training involving at least 60 credits a year.

The new entrant’s minimum wage applies to some 16 and 17 year old workers. These minimum wage rates are effective from 1 April 2010. There is no statutory minimum wage for employees who are under 16 years old.

By law, employers must pay at least the minimum wage - even if an employee is paid by commission or by piece rate. The minimum wage applies to all workers aged 16 years or older, including home workers, casuals, temporary and part-time workers.

The only exception is when an employee holds an exemption permit.

Holiday pay must be paid in addition to the minimum wage. If an employee receives “pay-as-you-go” holiday pay, this payment must be a separate and identifiable part of their pay.

An increase in the minimum wage will not affect an employee’s other conditions of employment, unless they agree to the changes.

An employee being paid less than the minimum wage can complain to a Labour Inspector, who may investigate and act to recover any money owed. Employees can also get help from ERS mediators.

For rates prior to 1 April 2010 refer to ERS Previous Minimum Wage Rates information.

What are the Criteria that Defines a “New Entrant”?

A new entrant is a worker who is 16 or 17 years old except if:

• They have completed three months or 200 hours of employment, whichever is shorter, OR

• They have been supervising or training other workers, OR

• They are subject to the training minimum wage.

For further information on Minimum Wage kindly visit: http://www.ers.govt.nz