Payroll Tips for a Hassle-Free Summer Break
10 December 2024
The Christmas season can create payroll challenges, but understanding the rules can help you stay compliant.
- Annual Leave: By law, employees are entitled to four weeks of paid leave per year. To avoid last-minute staffing problems, set clear deadlines for leave requests.
- Holiday Pay: Employees must be paid for public holidays that fall on their regular workdays. Keeping up-to-date employee records and rosters ensures accurate payment.
- Christmas Closures: Plan ahead for any business shutdowns. You must provide at least 14 days' notice before a closure. If an employee doesn’t have enough leave, they must be paid 8% of their gross earnings since their start date or their last leave entitlement, minus any leave paid in advance if agreed upon.
- Cashing Up Leave: If it’s part of the agreement or you choose to allow it, employees may cash up to one week of annual leave each year. However, you cannot pressure them into doing so.
- Casual Workers: Casual employees should receive an additional 8% on top of their earnings instead of accruing leave, and this must be clearly shown on their pay slips.
With careful planning, you can keep payroll running smoothly, allowing both you and your team to enjoy a stress-free holiday season. Feel free to reach out if you need any assistance or clarification.
How to attract great people to your business and how to keep them. Three tips to help you rise to the challenge to become an employer of choice.
As an employer, there are several obligations and expectations set by the Inland Revenue Department (IRD) that you must adhere to. Understanding these requirements is essential for maintaining compliance and avoiding any potential penalties. Let's take a closer look at what the IRD expects from you as an employer. Register as an Employer Before you hire your first employee, you are required to register as an employer with the IRD. This is a crucial first step in ensuring that you can meet all tax and payroll obligations. Accurate Record Keeping The IRD requires you to keep accurate and detailed records of all employment-related transactions. This includes: Employee personal details Wages and salary paid Payroll dates and methods PAYE deductions and remittances Details of benefits or allowances provided to employees Maintaining proper records helps ensure that you are reporting and remitting the correct amounts to the IRD. Deduct PAYE Tax You are responsible for deducting PAYE (Pay As You Earn) tax from your employees' pay. This involves calculating the correct amount of PAYE and ensuring it is deducted from each employee's salary or wages before their net pay is provided. Pay Employer Contributions In addition to PAYE, you may also be responsible for contributing to your employees' social security and retirement benefits, depending on the country you operate in. These contributions are typically paid in conjunction with PAYE tax. Issue Statements and Forms At the end of the tax year or upon employment termination, you should provide each employee with a statement showing their total earnings and PAYE deductions. Additionally, filing the appropriate end-of-year PAYE schedules with the IRD is required. File Employer Returns Employers are required to file regular returns with the IRD, which could be monthly, quarterly, or annually, depending on specific regulations. These returns should accurately report all payroll activities, including PAYE deductions. Handle Tax Codes and Changes It's crucial to apply the correct tax codes for each employee's circumstances. Any changes in employment status or tax code must be updated promptly to ensure accurate tax withholdings. Comply with Audit Requests The IRD may audit your business to ensure compliance with employer obligations. As such, being prepared to provide all requested information and records in a timely manner is vital. Adhering to these expectations from the IRD is not just about compliance; it's about fostering a transparent and trustworthy relationship with your employees and the tax authorities. If you need assistance with understanding or managing your obligations as an employer, consider reaching out to a professional accountant. Our team is here to help you navigate these responsibilities seamlessly, ensuring peace of mind and allowing you to focus on growing your business. Feel free to contact us for further information or assistance.
Thinking of starting your own sole trader business? The Sole Trader Toolkit from the Ministry of Business, Innovation and Employment has all the basic advice you might need.
To discuss all your account matters please call us on 09 438 1001
