From 1 April 2012 the employer contributions will no longer be tax free. The employer contributions will remain at 2%, but will now be net of the Employer Superannuation Contribution Tax (ESCT) deducted at the employee's marginal rate.
The current ACC levy for the 2011/2012 year is $2.04 per $100 of earnings.
From 1 April 2012 the ACC Levy for the 2012/2013 year drops to $1.70 per $100 of earnings.
From 1 April 2012 all student loan borrowers must add "SL" to their tax code regardless of earnings. Previously student loan deductions were only required for earnings over the repayment threshold.
New Special student loan tax codes will be introduced to handle over and under deductions of student loans.
We recommend that you upgrade your payroll system before 1 April 2012 to ensure that your software is kept up to date with the latest changes.
For MYOB payroll users, the latest MYOB Payroll complies with the new changes. To upgrade to the latest version please contact Martin or Jordan.
See below for new MYOB Payroll features
The minimum wage will change from $13 per hour to $13.50 per hour for all employees 16 years and over.
Training & New Entrants Wage
The Training and New Entrants minimum wage will increase from $10.40 to $10.80 - which equates to 80% of the adult minimum wage.
MYOB Payroll 2012 - New Features
Updating Employer Superannuation Contribution Tax (ESCT) Rates
When you upgrade to Payroll 2012 and start the new payroll year, a message will appear advising that your ESCT rate must be re-calculated.
to this message. This will automatically update your employees ESCT rates to Calculated
in the employee's Employment Details (As shown below).
Using the new calculated rate ensures the correct amount of ESCT is deducted for each employee.
For more information of how the ESCT rates are calculated in MYOB click here
to visit the MYOB support topic on the changes.
Updating Employees Tax Code for Student Loan Deductions
Any employees with a student loan needs to supply their employers with a new declaration. You can then update their tax code details in the "Employment Details" tab of the "Maintain Employees" window for each employee as shown in the example below.
The IRD have also introduced two new deduction codes for Student Loans:
- SLBOR: This tax code is to be used to identify extra voluntary repayments made through an employer. Sometimes an employee may choose to make additional repayments off their student loan in addition to their normal repayment. This tax code would be used in these instances.
- SLCIR: This tax code is used for 'catch up' payments / student loan arrears. This is required by the IRD when a significant shortfall in deductions was made throughout the year.
Setting up the additional Student Loan repayments
To make payments using the new additional repayment codes, select the correct code within the Compulsory Deductions tab of the Maintain Employees window for each employee required.
In our examples below you can see that:
An additional Borrower Deduction (SLBOR) has been set up to deduct a voluntary repayment of 2.00% of the employee's gross earnings.
A Student Loan 'catch up' or arrears repayment (SLCIR) has been set up where the Deduction in Default advised was $560.00 and the rate of repayment is 5.00% per pay. Payroll 2012 will keep a record of the balance outstanding and cease the repayments once the amount in default has been paid off.
Once the deductions are set up, this will ensure that the correct information information about the student loan deductions are sent to the IRD each month on the Employer Monthly Schedule.
You can continue processing your pays as you normally would with the Student Loan additional repayments automatically deducting from your employees pays.
If you are having problems updating your payroll or would like to talk to some one regarding these changes please contact either Martin or Jordan.