Welcome to our latest update on payroll news and Crystal Payroll updates! As part of the 2024 New Zealand Government Budget, significant changes to tax brackets will soon take effect, impacting payroll calculations. We’ll also cover the proposed amendments to the Holidays Act 2003 so you know what to expect in the future. Plus, we have new features we’ve added to make your payroll process smoother than ever. Read on to stay up-to-date and ensure your payroll is always accurate and compliant.
2024 NZ Government Budget Update
Adjustment to Tax Brackets
On 30th May 2024, the New Zealand Government announced its budget for the year. Starting 31 July 2024, all income-earning Kiwis will receive tax cuts as part of a four-year $14.7 billion tax package. Adjustments to tax brackets will affect payroll calculations, but don’t worry—our system will handle all these automatically. Here’s what you can expect in terms of weekly savings for different income groups:
- Medium income earners: $50.00/week
- Minimum wage earners: $12.50/week
- Working couple with a combined income of $150,000: $40.00/week
- A single adult earning $55,000/year: $25.50/week
- Sole parent with two teenage children: $45.00/week
- Retired couples receiving superannuation: $4.50 to $13.00/week
Our system is designed to seamlessly integrate these changes into your payroll calculations, ensuring everything is accurate and up-to-date without any extra effort on your part.
Manual Tax Code Changes – Independent Earner Tax Credit (IETC)
The eligibility for the Independent Earner Tax Credit (IETC) has increased from $48,000 to $70,000. If your employee(s) is/are eligible, you may need to update their tax code from M to ME.
What You Need to Do
This change needs to be made manually by employers for affected employees. Unfortunately, we are unable to automate this process because it requires direct discussion between employers and employees to ensure accuracy.
Proposed Amendment to the Holidays Act 2003
The New Zealand Holidays Act 2003 is being amended to address long-standing issues with the current law. These changes aim to simplify the complex leave calculations and reduce compliance costs for employers. Here’s a brief overview of the proposed key upcoming updates:
- Simplified Holiday Pay Calculations
- Immediate Leave Entitlements
- Full Pay After Parental Leave
- Clarified 8% PAYG for Irregular/Casual Work
- Pro-Rated Sick Leave
The government plans to release a draft of the Bill for public consultation in September 2024, with the final legislation expected shortly thereafter. These updates aim to simplify compliance and better reflect modern work practices.
At Crystal Payroll, we are committed to staying on top of all legislative changes, including the upcoming amendments to the Holidays Act. Our cloud-based system is continually updated to ensure full compliance with the latest regulations, so you can be confident that your payroll processes are always accurate and up-to-date.
We will keep you posted on any new changes affecting your payroll. For more information please visit the Ministry of Business, Innovation & Employment’s website.
System Updates
Our team has been rolling out several new features and updates to make your payroll easier and keep things running smoothly. Here are the new improvements:
- ESCT Rate Yearly Reset: You can now click the ESCT Rate Yearly Reset button to update ESCT for all employees at once.
- Leave Summary on Payslips: We’ve introduced a feature that sums up leave on payslips, providing a clear overview for your employees.
- Bulk Upload New Pay Rates: You can now group upload new pay rates from a .CSV file, streamlining the process of updating pay rates for multiple employees.
- Employee Share Scheme Pay Item: A new Employee Share Scheme Pay Item has been added, which defaults the PAYE calculated to $0.00.
- Tax Threshold Changes: We will handle the new tax threshold calculations ensuring correct pay periods when the change goes live on the 31st of July.
