If you wish to make irregular payments to the employee, you may prefer to calculate tax using a method that spreads the PAYE more fairly for the employee. In this case, select a tax code of 'No tax', and in the Pay Calculation screen add a PAYE deduction and enter the cash amount to be deducted as PAYE tax.
If the payee is not an employee but receives withholding payments, you enter the rate of withholding tax in the Tax Rate %.
The child support deduction will be reduced automatically if there is insufficient net pay to make the full deduction, using the 60% rule.
If you add a 'Tax periods' pay item to the employee's pay, the child support deduction will be multiplied by the number of tax periods.
The 'IR Arrears Payment' deduction has to be added manually to the payee's pay calculation screen. The amount to be deducted will be calculated automatically by the system, and when all the arrears have been recovered, the deduction cash will be set to zero.
Whenever any change is made to the IR Arrears Total, the IR Arrears Balance on the Payee, Tax Conditions screen is set to the same amount.
In order to process the arrears, you will also have to add a 'IR Arrears Payment' deduction to the payee's pay calculation screen. The amount to be deducted will be calculated automatically by the system, and when all the arrears have been recovered, the deduction cash will be set to zero.
Any IR arrears recovered from payees cannot be included in the tax return monthly schedule totals, however, you can print a Pay History Report, selecting a Deduction report type and print a report of 'IR Arrears Payments' for any specified range of pay dates.
Warning! If this option is selected, the PAYE tax calculated will not agree with the IRD tax tables.
Check this box if you want to calculate the payee's tax on a year to date basis. The taxable pay this period is added to the taxable pay for the year to date and then divided by the current period's week or month number. The tax is calculated on the result. That is then multiplied by the period number and has the year to date tax deducted from it. The end result is that where the payee's taxable pay varies during the year, the payee's tax at the end of the year is more accurate.
If the employee has opt-out of KiwiSaver, enter the date from which they have opted-out, and the date they signed the form requesting opt-out.
If the employee wants to take a contribution holiday, add the KiwiSaver employee deduction and employer contribution pay items to the standard pay tab, and enter the date the employee wishes to stop deductions in the pay item stop date.
Tax Rate %
This will contain a value if you have received an order from the IRD for this employee or the employee has requested tax to be deducted at a higher rate than normal. A rate entered here will be applied to the total of the payee's taxable pay. It will over-ride the calculation specified by the payee's tax code.
Student Loan Dedn Rate %
This will only contain a value if you have received an order from the IRD for this payee or the employee has requested student loan deduction to be deducted at a higher rate than normal. A rate entered here will be applied to the total of the payee's taxable pay. It will over-ride the calculation specified by the payee's tax code.
Child Support Deduction
Enter the amount of child support to be deducted each pay period. You do not need to manually add a 'Child Support' deduction to the payee, standard pay items, or pay calculation screen. It will be added automatically when the next pay period is opened, or any change is made to the current pay period's pay for the employee.
Extra Pay Rate %
If the employee elects to have extra pay taxed at a higher rate, enter the percentage rate at which the extra pay is to be taxed. The rate should not be less than the base extra pay rate.
IR Arrears Balance
The IR Arrears Balance is maintained by the system. It is initially set to the IR Arrears Total when that is entered in this screen. Thereafter it is reduced by the cash amount of the 'IR Arrears Payment' deduction processed each pay period for the payee.
IR Arrears Total
If you receive a request from the IRD to recover an arrears of tax owed by the payee, you set the IR Arrears Total on the Payee, Tax Conditions screen to the total specified by the letter.
SSCWT Rate %
If the employee has superannuation contributions paid on their behalf, those contributions are taxed using the 'Specified Superannuation Contributions Withholding Tax' (SSCWT) rate. Employees can elect to have SSCWT calculated at a higher rate if they have higher earnings. A rate entered here will be applied to the total of the payee's superannuation contributions. It will over-ride the calculation specified by the payee's tax code.
Calc
Click this button to set the employee's SSCWT rate to the rate applicable to their last year's earnings.
IR23 Certificate Number
Record here the certificate number of the IRD request to deduct tax at a specific rate for this employee. Leave blank if you have not received an IR23.
Not reported on IR348
Check this box if the employee's details are not to be included on your IR348 report.
Company Proprietor
Check this box if this payee is a proprietor of the company for the purposes of the Statistics NZ employment survey.
Year To Date Tax Calculation
KiwiSaver
Tick the 'opted-in' checkbox if the employee has opted-in for KiwiSaver deductions. A KiwiSaver employee deduction pay item will be added to their pay automatically. Enter the date the employee's details were received.