There are four significant changes occurring to payroll from 1 April 2023.
1. Adult minimum wage (over 16 years old) will increase by $1.50 to $22.70 per hour and the starting-out and training minimum wage will increase by $1.20 to $18.16 per hour
2. The annual ACC earner levy rate is increasing from 1.46 percent to 1.53 percent
3. The annual ACC earner levy threshold is increasing from $136,544 to $139,384
4. The student loan threshold is increasing to $439 per week
What does this mean for your business? Get ready now!
Identify employees who may be affected by the minimum wage increase. This could include salaried staff earning ~$48k pa with unspecified hours. If an increase is required this must be in place and ready for pay periods from 1st April 2023.
Below is a general guideline for year end actions to ensure your payroll system is ready for the changes:
ensure you have processed your final pay run for the year and checked this has been filed to IRD
review pay history reports and leave transaction reports for any surprises
issue annual earnings certificates to all employees
check employee details including tax code, contact details, emergency contacts
check and update any employees affected by the minimum wage increase. If a pay increase is required inform employees in writing as this is a variation to their employment agreement. If a salaried employee this may involve calculating what their maximum working hours are for each pay period before a top-up payment may be needed.
review and update ESCT rate for each employee.
check sick leave entitlements: after 24 July 2021, employees are entitled to 10 days of sick leave at their next anniversary.
review current leave entitlements especially if the work pattern has recently changed. Are the employees' working hours correctly recorded?
Contact Tim Doyle or Jane Evans today to discuss any payroll queries or your business (or any other matter) on 07 823 4980 or email us. Our office is in Cambridge, NZ, but distance is no problem. We have many international and national clients.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.