Employer account

From April your payroll account in myIR will look a bit different. All your employer accounts will be combined into a single place to manage transactions and obligations. This means that your employer related assessments and correspondence will be grouped so you can see more employer information in one place, and we won’t have to write to you as often.

Here’s a summary of some of the other proposed changes coming up:

• The IRD may collect hours paid as part of your employment information.
• The IRD will notify you when an employee’s student loan is almost repaid – telling you the final deduction amount and their new tax code.
• The IRD will help ensure you’re making the right KiwiSaver deductions and that eligible employees are enrolled.
• When on-boarding new employees, the new employee details (IR346) and KiwiSaver (KS1) information will be combined to be just one form.

For more information on these changes for employers visit ird.govt.nz/payroll

If you have not given your IRD number to your interest payer, or if you have given them your IRD number but did not choose a resident withholding tax rate, tax will be deducted from your interest payments at 33%.

From April 2020, if you have not given your IRD number to your interest payer, resident withholding tax will be deducted at the ‘non-declaration’ rate of 45%. If you have given your IRD number to your interest payer but have not chosen a resident withholding tax rate, tax will be deducted at the ‘default’ rate of 33%.

If you have given your interest payer your IRD number, you may use the 10.5%, 17.5%, 30% or 33% rate. This is the amount of tax to be deducted during the year. It should match your income tax rate. If the resident withholding tax rate you choose does not match your income tax rate you may receive an end of year tax bill.

The New Zealand Government has announced that it will increase the national adult minimum wage to $18.90 an hour, effective from April 1 2020.

The increase means that workers will receive an extra $1.20 per hour, or $48 per week before tax for an employee who works 40 hours a week.

The increase continues the Government’s plan to achieve a $20 adult minimum wage by 2021.
Minimum Wage Rates, Effective from 1 April 2020

Adult Minimum Wage – $18.90 Per Hour.

This wage is the most commonly used by Kiwi businesses and applies to all the employees who are 16 years of age or older, unless they are on the starting-out or training minimum wage.

Starting-Out Wage – $15.12 Per Hour

Workers aged 16-19 who are entering the workforce for the first time and who satisfy certain conditions.

Training Minimum Wage – $15.12 Per Hour

This category of wage applies to employees aged 20 years or over who are completing recognised industry training involving at least 60 credits per year in order to become qualified.

From 1st July 2020, the price of the Xero Starter plan is increasing by $2.50 a month, and Xero Standard and Xero Premium plans are increasing by $2 a month, for new and existing customers in New Zealand. There’s no change to the prices of Xero Ledger and Xero Cashbook.

Week 1: First things first
Talk to your accountant or bookkeeper. They’ll tell you what you need to do before 31 March including what you can claim for and what you can’t. Remember, tax time is busy for them too, so the more prepared you are, the smoother the process, and the better the result.
File your return on time. Don’t waste your hard-earned cash on unnecessary interest and penalties. Get your accounts up to date, tidy up loose ends and file on time.

Week 2: Your assets and stock
Review your inventory. The value of your stock affects your business’s taxable profit. Do a meticulous stocktake before year-end. Get rid of any out-of-date or damaged items and write them off.
Extra assets on board? Year-end is the time to ditch surplus assets. If you can sell them, great, otherwise write them off.

Week 3: Your spending
Sooner rather than later. If you’re planning to buy any new equipment or assets, do it on or before 31 March (rather than 1 April) to reduce your taxable income and gain a full month’s depreciation.
Got invoices and receipts for your expenses? It can be tricky to keep track of everything so if you’re not already, go digital. Scanning receipts and saving electronic invoices in the cloud saves time and space.

Week 4: Your staff
Payroll up to date? Now’s the time to check your payroll system only includes current staff and that all their details are correct. Ensure former staff don’t have access to company systems.
Remember tax on bonuses: Special bonuses this time of year can be a great way to reward and motivate staff, just remember to get the tax right on any lump sums made. Also keep in mind any bonuses for the current year, and holiday pay or long service leave paid out within 63 days after 31 March can be deducted against your current year income.

With a third of New Zealanders renting homes, and some for a lifetime, it’s key to have clear, fair rules for tenancies. The Government’s tenancy law reforms announced late last year aim to improve tenants’ security and stability while protecting landlords’ interests. The Residential Tenancies Amendment Bill is now making its way through Parliament, with the Select Committee due to report on it in June this year. We’ll keep you posted on the changes.

What landlords need to know:

• You will only be able to increase the rent once every 12 months (instead of six).
• You won’t be able to get rid of tenants without a reason. Currently, periodic tenancy agreements can be terminated without cause as long as the landlord gives 90 days’ notice. The RTA will now have a list of reasons you have to choose from.
• Tenants will be able to add minor fittings such as brackets to secure furniture against earthquake risk, to baby proof the property, install visual fire alarms and doorbells, and hang pictures.
• Rental “bidding wars” will be banned.
  The Tenancy Tribunal will be able to award compensation or order work to be done up to a value of $100,000 (instead of $50,000).
• New tools will be available to help you take direct action against tenants breaking the rules.

Changes relating to damage, methamphetamine, and unlawful rental premises:

• If tenants (or their guests) damage your rental property because of careless behaviour, they’ll be liable. They can be charged up to a maximum of four weeks’ rent or your insurance excess, whichever is lower.
• If you have insurance, you need to include this (and the excess) in any new tenancy agreement. You must also note that a copy of the policy is available to the tenant on request.
• You can now test for methamphetamine while your tenants are living there. You need to give tenants at least 48 hours’ notice (but not more than 14 days’ notice). You need to give boarding house tenants 24 hours’ notice.
• You have to meet all legal requirements relating to buildings, health, and safety that apply to your rental property. You also have to ensure your property can legally be lived in at the start of the tenancy.
  

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