Minimum Wage Increase
On 1 April 2021 the minimum wage will increase to $20 per hour. This rate applies to all employees 16 years and over. The starting-out and training hourly minimum wage rates will increase to $16 per hour, remaining at 80% of the adult minimum wage.
Refer here for more information.
Salaried employees – check for Minimum Wage requirements
If you have salaried employees, you need to make sure that their total remuneration meets minimum wage requirements for each individual pay period.
Any employees’ earnings around $42K per annum should be reviewed.
Employees must be paid at least the minimum hourly wage rate for every hour worked.
Top Tip: ($42,000 / 52 weeks / $20 per hour = 40.38 maximum working hours)
Employees currently on or just above $20 per hour
We recommend that you review all employee’s who currently earn $20 or just over per hour. The increase in Minimum Wage is 5.82%. Where possible this could be a consideration for increasing other employee’s wage rates.
Living Wage
The Living Wage rate is voluntary and currently $22.10 per hour. A living wage is the income necessary to provide employees and their families with the basic necessities of life, enabling them to live with dignity and to participate as active citizens in society.
Refer here for more information.
Top Income Tax Rate
From 1 April 2021 a new top personal income tax rate of 39% will apply for employees earning over $180,000 per annum.
Refer here for more information.
Top Tip: Remember to review and update any salaries above this threshold.
Student Loan Threshold Change
The Student Loan Threshold from 1 April 2021 to 31 March 2022 will increase to $390 per week. Check your payroll software or check the calculations through the PAYE Calculator and update the filing period to 31 March 2022.
Refer here for more information.
Top Tip: Remember to update all AP’s of employees with Student Loan deductions.
ACC Earner Levy remaining unchanged
The ACC Earner Premium will remain at 1.39% per $100 liable earnings for the year 1 April 2021 to 31 March 2022. The maximum Liable Earnings will remain at $130,911.
KiwiSaver Annual ESCT Review – 1 April each year
At the first pay run of the new financial year, as an employer you are required to review each employee’s ECST rate to ensure that the rate is correct.
Refer here for more information.
Top Tip: To calculate this = Total Gross Earnings + Employer KiwiSaver contribution in the last 12 months.
Record keeping requirements – REMINDERS!
As an employer, you must keep wage and time, and holidays and leave records that comply with the Employment Relations Act 2000 and the Holidays Act 2003.
Refer here for the full details.
For any questions please contact the Accounted4 Payroll team.
Anne - Ext.831 - Email: anne.b@accounted4.co.nz
Carolyn - Ext.837 - Email: carolyn.l@accounted4.co.nz
Kate - Ext.825 - Email: kate.c@accounted4.co.nz
