For many small business owners, it is always better to employ an accounting specialist to manage tax returns and payroll processing. While this may cost extra or become an on-going expense, it can save you from the headaches and troubles of getting things done right, especially if it is not your forte. The importance of the service is highlighted even further whenever things get a little tricky or if there are any voluntary payments your employees need to make.
Employers everywhere want to make payroll time a little less taxing, and if you want to do the same, then know that accounting professionals can help you do the same. If you decide to do it, however, you need to know more about the payments you need to deduct from your employees’ salary.
Pay as you earn (PAYE) is the tax you need to deduct from employee wages. The amount deductible, of course, depends on the employee’s salary level and tax code. Inland Revenue offers a PAYE calculator and deduction to help employers work out the amount they need to take out on the salary. The Income Tax Professionals Ltd notes that PAYE is important in filing returns and making payments.
This voluntary scheme is set up by the New Zealand government to help employees save for their retirement. As an employer, it is important that you get it right, as you could be liable for penalties if you don’t meet obligations. In KiwiSaver, you need to enrol eligible new employees, deduct contributions, and provide KiwiSaver information packs to all new employees.
These are the payments you need to make to certain types of self-employed contractors. These have flat rate taxes regardless of how the payment is received. The rate depends on the type of work or service offered by the contractor.
It is also important to deduct from employees paying back a student loan. The deductions are always based on their income. For child support deduction, Inland Revenue (IR) will give you a child support notice, and will let you know the amount you need to take out on an employee’s salary.
Just like tax returns, payroll deductions can be a little tricky for the inexperienced. If you want to save yourself some time and confusion, get help from accounting and tax professionals.