Any article describing tax changes inherently suffers from being out of date quickly, replaced by subsequent changes, new announcements or other measures.
During 2017 for instance, there were more than a dozen changes in the tax system, at least two of which superseded changes announced earlier in the year.
With the change in Government and the vast uncertainty of what they will do in the next budget round and find from the tax working group recently established, there is even more uncertainty.
Nevertheless below are four changes that are, as of this writing, forthcoming. If you have any questions about these or any other changes or tax matter, contact us.
Increase in minimum wage
From 1 April 2018, the minimum wage will increase to $16.50 per hour, with consistent increases in other work classes such as apprentices. The Government expressed its commitment to raise the minimum wage further over time to achieve levels of the ‘living wage’ to be defined.
Increase in paid parental leave duration
From 1 July 2018 paid parental leave will increase from 18 weeks to 22 weeks, with the Government ultimately to see it increase to 26 weeks in July 2020. Although paid parental leave is paid by the Government, entitled workers still receive time off from their employment positions and anticipate a return to those positions at the end of the leave period. This may present challenges for employers.
Introduction of the AIM provisional tax payment method
Beginning 1 April 2018 is the introduction of a new method to pay provisional tax. Businesses with approved software packages including MYOB and Xero will be able to calculate and pay their provisional tax based on their accounting profit derived from those systems. This replaces the standard method for those who elect to use it. Details are expected to be provided in early 2018, but this method may suit qualifying businesses with irregular earning patterns.
Payment of PAYE during each payroll cycle
Significant changes are coming to the way employer returns are filed beginning from 1 April 2018. Employers or their payroll processing intermediary will need to submit all payroll data (Gross, PAYE, Kiwisaver, Student Loan, etc) into IRD’s system every time they run their payroll Employers will have two business days after each pay run to give their data to IRD. This replaces the current once a month filing. All payroll data must be filed digitally through IRD’s online portal