Employer invoicing by ACC takes place in July and is based on employee earnings for the year ended 31 March.
Your ACC Premium consists of:
ACC WorkPlace Cover provides businesses with the peace of mind of “no fault” personal injury cover in the workplace and is the standard cover provided to all employees of a business.
A work-related personal injury is an injury that occurs when an employee is either:
The personal injury can be due to an accident, a gradual process (eg hearing loss), a disease or infection caused by a risky work task or work environment.
The Residual Claims Levy Rate covers ongoing costs for old injuries that occurred before 1999. In 1999 the ACC funding was changed to cover the full lifetime costs of injuries that occurred in that year.
The IRD provide ACC with relevant earnings data from employer monthly schedules. From this information, ACC calculates the total levies due. To work out your levy, you can use the online calculator by click here.
For more information on ACC premiums, please give us a call or visit the ACC website.
Depreciation allows for the wear and tear on a fixed asset and must be deducted from your income.
Generally you must claim depreciation on fixed assets used in your business that have a lifespan of more than 12 months. However, in special circumstances you can elect not to depreciate an asset by applying to the IRD. Not all fixed assets can be depreciated. Land is a common example of a fixed asset that cannot be depreciated.
You will have to keep a fixed asset register to show assets you will be depreciating. This should show the depreciation claimed and adjusted tax value of each asset. The adjusted tax value is the asset's cost price, less all depreciation calculated since purchase.
There are two types of calculations to calculate depreciation on your business fixed assets, diminishing and straight line. Your assets can be depreciated by using different depreciation methods as long as you use the same method for the asset for the full year.
To view the IRD depreciation rates and the methods for calculating depreciation (IR260) click here
The government has made changes to the rules for depreciation, depreciation loading rules and depreciation rates on buildings have changed. While depreciation allowances on most building structures ended on 1 April 2011, depreciation can still be claimed on a wide range of commercial and industrial building fit-out assets. For more information, please click here.
Entertainment expenditure is limited to a 50% deduction if it falls within the following:
Some examples of fully deductible entertainment expenses are food and drink:
1. while travelling on business
2. at promotions open to the public
3. at certain conferences.
There are a number of exemptions from these rules, please contact us, or see the IRD Entertainment Expenses (IR268) booklet for more information.
To support the claims for business entertainment expenses, all invoices and receipts must be kept.
Fringe Benefit Tax (FBT) is a tax on benefits that employees receive as a result of their employment, including those benefits provided through someone other than an employer.
Fringe benefits (perks) include most benefits given to employees in addition to their salary or wages. The four main groups of fringe benefits are:
Gifts, prizes and other goods are fringe benefits. If you pay for your employees' entertainment or private telecommunications use, these benefits may also be liable for fringe benefit tax.
Some benefits that are not liable for fringe benefit tax include:
Free, subsidised, or discounted goods and services are available for exemptions:
If you would like further information on whether FBT is payable and how this is calculated, please give us a call.
The government abolished gift duty for dispositions of property made on or after 1 October 2011. This means that:
For gift duty on any gifts made before 1 October 2011, the IRD's guide on the IRD website is helpful.
A gift is something given when:
If something of lesser value is given in return for a gift, the value of the gift is the difference between the two values.
These items can all be gifts:
It was common in New Zealand for gifting to trusts to be limited to $27,000 per annum per giftor to avoid gift duty. With the removal of gift duty this restriction no longer exists however this raises other significant issues that giftors should consider before gifting more than $27,000 per annum.
For more information on gifting or gift duty please give us a call.
GST is a tax on the supply of goods and services in New Zealand by a registered person on any taxable activity they carry out. The rate for GST is 15% although it can be zero-rated for exports.
Certain supplies of goods and services are 'exempt supplies'. These include:
GST registration is required if the annual turnover of the business for a 12-month period exceeds or is expected to exceed $60,000.
GST returns can be filed monthly, bi-monthly or six monthly. There are certain requirements for who must file monthly returns and who can file six monthly returns.
There are three methods of accounting for GST:
If your turnover exceeds $2,000,000 pa you cannot use the Payments basis option.
If you are selling or are thinking of selling your products through your website please also refer to the section on GST and E-Commerce.
For more information on GST and under what method would be best for you to register under call us on (09) 551 3631 or email
Sale of Physical Goods via the Internet
If a GST-registered person sells goods via the internet and the goods are physically supplied to a customer in New Zealand, GST is chargeable at 15%.
If goods are sold via the internet and physically supplied to customers overseas the sales can be zero-rated for GST purposes. It is important to prove the goods have been exported (entered for export by the supplier) and sufficient evidence should be held to prove the export.
Sale of Digital Goods via the Internet
If a GST-registered person sells digital products via the internet which are downloaded such as music, software or digital books, to a New Zealand customer they must charge 15% GST. (These products are treated as services for GST purposes).
If digital products are sold via the internet and downloaded by an overseas customer they can be zero-rated but it is important to prove that the products are "exported" otherwise GST must be charged.
Evidence required to prove products are exported
Scenario 1:
Physical goods are exported overseas by the supplier. The customer is located overseas.
Scenario 2:
Physical goods are exported overseas by the supplier. The customer is located in New Zealand at the time of purchase.
Scenario 3:
Digital products are downloaded by a customer who is located overseas.
Note: In this scenario, as can be seen from the above list, it is unlikely that only one form of information will prove that the customer is overseas. It is expected that a reasonable attempt would be made to confirm the customer is overseas to support zero-rating. For more information call us on (09) 551 3631 or email
All New Zealand residents and people entitled to live here permanently up to the age of 65 are eligible for KiwiSaver. All new eligible employees must be automatically enrolled in KiwiSaver. However there are some employees who are exempt from automatic enrolment. These include:
All eligible existing employees can join the scheme at any time they wish by notifying their employer.
There are 3 employee contributions rates, being 2%, 4% or 8%. The employee can elect the rate at which they want their contributions deducted. If an employee does not elect a rate then the default rate of 2% will be used by the employer for contribution deductions made. This will rise to 3% from 1 April 2013.
Compulsory Employer Contributions
From 1 April 2008 it became compulsory for employers to contribute to their employees’ KiwiSaver scheme.
This compulsory contribution started at 1% of employees’ gross salary or wages on 1st April 2008 and increased to 2% on 1 April 2009. The employer contributions will rise to 3% from 1 April 2013.
From 1 April 2012 all employer contributions will be subject to Employer Superannuation Contribution Tax (ESCT) at the employees’ marginal tax rate.
Government Assistance
The government also:
Note: There is no Crown guarantee of KiwiSaver schemes or investment products of KiwiSaver schemes.
List of KiwiSaver Scheme Providers
Employers must:
For more information on KiwiSaver and how this may apply to you call us on (09) 551 3631 or email
Pay As You Earn (PAYE) is the basic tax taken out of your employees' salary or wages. The amount of PAYE you deduct depends on each employee's tax code.
PAYE employees must complete a Tax code declaration (IR 330) as soon as they start working for you. If an employee fails to complete the tax code declaration, you must deduct PAYE at the no-declaration rate.
Employers must also file an employer monthly schedule with IRD detailing each worker's gross earnings and deductions. Employers with gross annual PAYE of $100,000 or more must file this schedule electronically with IRD using IRD’s IR File system.
If you are a ‘small employer’ with gross annual PAYE deductions of up to $500,000, payments are made to IRD on the 20th of the month following the deductions. The employer monthly schedule must also be filed by the 20th of that month
If you are a ‘large employer’ with gross annual PAYE deductions over $500,000, the deductions made from payments made to employees between the:
For more information regarding PAYE or to register as an Employer call us on (09) 551 3631 or email
Provisional Tax is not a separate tax but a way of paying your income tax as the income is received through the year. You pay instalments of income tax during the year, based on what you expect your tax bill to be. The amount of provisional tax you pay is then deducted from your tax bill at the end of the year.
If your residual income tax is $2,500 or more you will have to pay provisional tax for the following year. Residual income tax is basically the tax to pay after subtracting any rebates you are eligible for and any tax credits (excluding provisional tax). Residual income tax is clearly labelled in the tax calculation in your tax return.
There are two ways of working out your provisional tax. One is the standard option and the other one is the estimation option. If you are also registered for GST and meet the other eligibility criteria, the ratio option may be available to you as well (see below for more on the GST Ratio option).
Standard option
The IRD automatically charges provisional tax using the standard option unless you choose the estimation or ratio options.
The standard option takes your residual income tax for the previous year and makes an adjustment. Due to legislative changes the calculation for the adjustment are:
Estimation option
The other way to work out your provisional tax is to estimate what your residual income tax will be. When working out the tax, keep the following points in mind:
To get the right tax rate -
Using the estimation option, if your estimated residual income tax is lower than your actual residual income tax for that year, you may be liable for interest on the underpaid amount
You can estimate your provisional tax as many times as necessary up until your last instalment date. Each estimate must be fair and reasonable
Due dates
The due date and amount of instalments you need to make for payment of your provisional tax each year depends on your balance date, which of the above options you use and how often you pay GST (if registered).
If you have a 31 March balance date and use the standard or estimation option, provisional tax payments are due on:
Interest
In some circumstances you may be charged interest if the provisional tax you paid is less than your residual income tax. If the provisional tax you pay is more than your residual income tax, the IRD may pay you interest on the difference.
Another Option – the GST Ratio Option
If you are also registered for GST you are able to pay your provisional tax at the same time as your GST payments. You will be able to use the ratio option if:
This method of paying provisional tax may not suit everyone. Solutions such as tax pooling can also be used to ease taxpayers' concerns and costs in calculating provisional tax. We suggest that you discuss your options with your accountant.
For further information on provisional tax give us a call on (09) 551 3631 or email
Resident Withholding Tax (RWT) is a tax deducted on interest earned from investments and bank accounts. The investment organisation or bank deducts this tax when they credit interest to you.
Companies may also deduct withholding tax from dividends paid to shareholders.
If you receive interest as income you need to:
For more information on RWT, the tax rate and how this tax applies to interest and dividends call us (09) 551 3631 or email
Tax credits can be claimed by individuals (not companies, trusts or partnerships) who:
You may qualify for a tax credit for:
If you claimed a donation, childcare or housekeeper tax credit in the prior year, the IRD will automatically send you a Tax Credit Claim Form in April each year. Otherwise, click here for the latest version of the IRD 526 Tax Credit Claim Form.
This is information relates solely to individuals and individual income tax. There are other tax credits which have been introduced. Please call us on (09) 551 3631 or email for more information on these.
Taxpayers who do not meet their tax obligations may face penalty or interest charges. To avoid such charges, you should file your tax returns on time and pay the full amount of tax you owe by the due date. If you are unable to pay your tax you must still file the tax return. This will illininate the non-filing penalty. You should then contact IRD to discuss entering into a payment arrangement.
If you have a number of overdue tax returns you should contact Norrie & Daughters on (09) 551 3631 or email us.
The main kinds of charges for failing to meet tax obligations are:
Solutions such as tax pooling can also be used to ease taxpayer concerns and the resulting exposure to use of money interest.
For more information about tax pooling and your exposure to tax penalties, give us a call. For more information about tax penalties click to view the Taxpayer Obligations, Interest & Penalties Guide
If you have any concerns about yoyur tax status and how to deal with a tax problem and the IRD then contact Norrie & Daughters on (09)551 3631 or email
