Payroll tax changes happening on 1 April 2013

From the first pay period starting on or after 1 April 2013, the contribution rate for employers and employees increases from 2% to 3% of gross earnings.

You will need to ensure your payroll system is ready for the changes.
The default rate will be 3% and employers must contribute a minimum of 3% as the compulsory employer contribution for all eligible employees. If an employee already contributes at either 4% or 8% there is no need to make a change to their contribution rate.

ML and ML SL tax codes can no longer be used

The low income (under $9,880) tax credit can no longer be claimed during the year by using the ML or ML SL tax code. For employees using these codes, from 1 April 2013 you must deduct PAYE from them using the tax codes M or M SL, unless they have given you a new tax code declaration form (IR330) stating an alternate code.

The tax credit for children has been repealed which may change how you tax students. Some transitional rules apply for the current tax year (1 April 2012 to 31 March 2013).

From 1 April 2013 school students will need to complete a tax code declaration (IR330) form and you must deduct PAYE from wages made to school children.

If the student employee is a KiwiSaver member, you will also need to start making employee deductions at 3%, but if the employee is less than 18 years old you do not need to make employer contributions.

From 1 April 2013 the standard rate for student loan repayments increases from 10% to 12%.

If an employee gives you a student loan special deduction rate certificate you need to make their deductions at the percentage rate shown on the certificate.

If an employee gives you a student loan repayment deduction exemption certificate you do not have to make any student loan deductions.