Make sure your tax records are correct before the end of the year.
Make sure your tax records are correct before the end of the year.
New Zealand's tax system for salaried workers is usually very efficient.
The PAYE system accounts for just over 40 per cent of the revenue tax take in New Zealand.
The frequency of its filing and payment terms have shown some success in keeping it at just over 5 per centof IRD total debt, the second lowest overdue tax type to Working For Families at 3.6 per cent.
Part of the process we undertake as accountants each year when doing the books is to look at the differences in actual payments versus filed PAYE returns with the IRD and provide feedback on variances between the two.
We find that around this time of year mistakes occur in the payroll system, mainly because of confusion around holiday payment calculations and entitlements.
Remember this year December 26 and January 2 fall on a Saturday and, even if your staff don't work weekends, the first workday after these dates is treated like a public holiday.
Employees can request to cash up a maximum of one week's annual leave. This is done in writing and is at the discretion of the employer. An employer cannot ask an employee to cash up their holidays.
Manual payroll records or outdated payroll software are also a major contribution to payroll errors.
If you're still keeping manual records after these holidays, change to a online payroll programme or use a professional payroll service. Thankyou payroll is a free programme if you're worried about cost. Not only will you save time, you'll have less paperwork.
You can also complete pays wherever there's an internet connection.
A payroll fault can have consequences including underpaid PAYE with penalties and interest, and errors that might affect staff entitlements
