13 Mar April 2013 Tax Changes
A common question we get after April 1st is ‘why has the take home pay for my employees changed?’. This year, the following changes may affect your pays:
- The minimum Kiwisaver contribution is rising from 2% to 3%. This will reduce the amount of pay your employees receive in the hand, and will also increase the employer contribution you make.
- The student loan repayment rate has increased from 10% to 12%.
- For higher earners, the ACC threshold has been increased which will mean they pay slightly more ACC.
- The tax codes ML and ML SL are being phased out. FlexiTime will automatically move these employees to M or M SL which may mean they pay slightly more tax.
All these changes will be made automatically in FlexiTime. While the student loan repayment rate increases for pays ending on or after April 1, the Kiwisaver rate changes for pays starting on or after April 1. This means that you may see two changes to take home pay amounts in subsequent pays.
There will be a small change to how the Employer Kiwisaver Contribution is shown on payslips. Instead of showing a quantity of 1 for a standard 2% employer contribution, the quantity will now reflect the percentage. This change will happen in the next few weeks. Then after April 1 this will be automatically changed to 3%.