Everything You Need to Know About IRD's April Changes
There are a collection of changes to employment law that started from the 1st of April 2019. They affect almost all employers in New Zealand, so it's important that you understand them and what they could mean for your employees.
Luckily, many of them are simplified for you if you are already with a PAYE intermediary like Thankyou Payroll. For more comprehensive information about other areas of payroll in New Zealand you can also have a read of our payroll guide.
The minimum wage is increasing to $17.70
As of Monday, 1 April 2019, the adult minimum wage rate went up by $1.20 to $17.70. The starting out and training minimum wage went up to $14.16 per hour on the 1st.
You can do a quick report in Thankyou Payroll to see your employee's pay rates and check who might need to be increased. If the 1st falls in the middle of your pay period and you'd like to make the change mid-cycle, you can find how to do that here.
More KiwiSaver Contribution % Options
Employees can now choose to contribute 3%, 4%, 6%, 8% or 10% of their pay, before tax. This is an increase in the number of options, with the inclusion of 6% or 10%, so your employees have more control over their saving.
The 'Contributions Holiday' has been renamed to 'Savings Suspension' and the maximum period of a suspension has dropped from 5 years to 1 year. Read more here.
Introducing Domestic Violence Leave
Employees are now entitled to up to 10 days of leave to deal with the effects of Domestic Violence on the 1st of April under the new Victims Protection Bill.
Domestic Violence leave works a lot like sick leave and bereavement leave currently does. For more information, you can read the Employment New Zealand page on it.
Increased Student Loan and ACC Thresholds
On 1 April 2019, the annual student loan repayment threshold increased to $19,760. This means that the weekly pay-period repayment threshold for people repaying their student loans has increased to $380. The maximum annual ACC earners levy threshold has also increased to $128,470.
Thankyou Payroll makes sure that you stay compliant with Student Loan, ACC earners levy, and other payroll related tax payments.
This is a big one, but it's also handled for you if you are with Thankyou Payroll! All employers will need to have switched to payday filing by now, so employers need to be filing employee earnings and payroll tax information with the IRD within two working days each time they pay their employees.
Thankyou Payroll has been payday filing since March, so if you're with us we've got you covered.
There are more changes coming in May, including these:
- Rest and meal break times will need to be set
- 90-day trials will be limited to employers with less than 20 employees
- New employees must start on terms consistent with collective agreements
- Employers will need to provide new employees with union information
- Collective agreements need to set pay rates and any pay increase over the term of the collective agreement
- Employers need to allow union representatives reasonable time to perform their duties within working hours and must pay employees at the same rate for doing union work as they would ordinarily be paid during their ordinary employment duties.
You can read more about these changes and the latest details here and check back in later this month for more updates. Send us an email at email@example.com if you have any questions as well!