With a number of different products – both electronic and online – now on the market, it is important for business owners and managers to ensure the system they use is one hundred percent accurate.
Many Kiwi businesses now use technology to streamline their business systems, but it is a double-edged sword if the programme is not fully compliant. Inaccuracies in the amount or the process used to pay staff can have serious financial consequences for both the payroll clerk and the company involved.
It is important that business owners ensure the payroll function they rely on is up-to-date with current employment legislation, and is also calculating those functions correctly. Noncompliance can result in fines of up to $10,000 for the individual and up to $20,000 for the company. However, it is easy to avoid such outcomes by selecting a payroll management programme from a trusted source.
To safeguard against any mistakes – even unwittingly made – it is important to invest in payroll software from an established, credible source. MYOB has been working with Inland Revenue for a number of years to ensure all software is fully compliant, with regular releases timed to ensure all functions are up-to-date with any legislation changes.
With the end of financial year nigh, Kiwi business owners are advised to talk to their accountant about their current payroll system to ensure its accuracy, particularly around holiday pay calculations. Regular approved training for all relevant staff also ensures they are able to competently use the program.
The complexities of payroll can be overwhelming, so being able to rely one hundred percent on the accuracy of business management tools can make a huge difference.
MYOB Payroll accurately calculates all payroll functions. A new release is scheduled for March 2012.
For more information on MYOB or to download free trial software, visit myob.co.nz
What you need to know: key changes to Payroll 2012
The 2011 budget announced several tax compliance changes that will have a major impact for employers and the management of their payroll. MYOB Payroll 2012 will take care of all these changes and take the worry out of managing their payroll.
Currently all members of KiwiSaver are entitled to an exemption from Employer Superannuation Contribution Tax (ESCT) for employer contributions up to 2%. Any contributions above 2% are subject to ESCT at varying rates and thresholds. As part of this change, users will need to ensure that the correct ESCT rate. Payroll 2012 will automate this procedure based on the employee’s historical earnings.
ACC levy rate change
The ACC levy rate is a component of the overall PAYE rate. The current rate for the 2011/12 year is $2.04 per $100 of earnings and this is set to drop to $ 1.70 per $100 earnings for the 2012/2013 year. This is a significant decrease, so if employers do not update their payroll their employees will be over-taxed. Payroll 2012 will automate this change.
Student loan change
New rules for student loan borrowers will be introduced in 2012. All student loan borrowers will be required to use a student loan (SL) tax code, regardless of earnings. Previously this had only be required if earnings were above the repayment threshold.
A new regime has been introduced for additional voluntary or compulsory student loan deductions. This requires new tax codes and new reporting requirements. Whilst the overall number of student loan borrowers impacted by this change is low, it could impact any employer with employees who are SL borrowers.
Employers will need to ensure the SL code is used for employees who are student loan borrowers. Payroll 2012 will automate the tax change for those employees with the SL code allocated.
The IRD is also introducing new tax codes for students who need to make additional compulsory or voluntary student loan repayments. MYOB Payroll will support this with new deductions, pay codes and changes to the necessary changes to IRD reporting.