From 1 April 2021, the following payroll changes come into effect, so prior to running the first pay for the 2022 tax year, take care to ensure your payroll systems have been updated where required.
- Minimum Wage is moving from $18.90 to $20.00 per hour
- Training Wage is moving from $15.12 to $16.00 per hour
These minimum wage rates will not automatically be updated in payroll systems, so make sure you check these for each employee.
The new rates are applicable for hours worked, not the date employees are paid. For example, payments for the week ending 4 April 2021 will include 29-31 March which will be at old rates, and 1 – 4 April which will be at the new rates. Some employees may therefore require multiple rates be applied in the one pay.
With the new 39% top tax rate you will need to adjust the ESCT rate for employees whose annual income is greater than $216,000. ESCT for these employees should now be deducted at 39%.
New secondary tax codes SA, or SA SL if the employee also has a student loan, will apply and will not include any ACC deductions. Employees using secondary tax codes should review their income position to determine if a change is required. To request a change, the employee should submit a new IR330 specifying the new applicable rate.
The student loan threshold is now $20,280, up from $20,020 last year. This is generally an automatic change implemented in payroll systems.
If you have any questions, please contact your Hayes Knight advisor.