Staff Member Retiring

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Contributing Cover User APO
6 Posts
Contributing Cover User
New Zealand

Staff Member Retiring

Hello

I am to pay a retiring staff member a lump sum. I see from IRD's website it should be taxed at 33% for his annualised income bracket. When I enter it against his MYOB payroll record, the tax comes out at more like 32%. Is there a special pay code I should be using In MYOB payroll?

3 REPLIES
Ultimate Partner jenniek
2,105 Posts
Ultimate Partner
New Zealand

Re: Staff Member Retiring

HI there @APO

Whichg Payroll are you using? If it is NZ Payroll, then you should be using the tax override button and using the lump sum payment line to pout in the final pay amount - the level of secondary tax depends on the level of the employees income. S for $14000-48,000, SH for 48000-70,000, and ST for 70,000+

Regards,
Jennie Kingma
JK Business Systems Ltd, Hamilton, NZ
Email: jennie@jkbusiness.co.nz
Contributing Cover User APO
6 Posts
Contributing Cover User
New Zealand

Re: Staff Member Retiring

Thanks Jennie

I'll just override the auto calculated tax, and key in tax to the value of 33% on the lump sum they're to get (as per the income ranges). This isn't the employee's secondary income.

 

Ultimate Partner jenniek
2,105 Posts
Ultimate Partner
New Zealand

Re: Staff Member Retiring

Hi @APO

The secondary tax codes are what you use for lump sum payments - as well as for secondary income.

Any ordinary time earnings are still taxed at normal tax - which is why the tax override button allows separation of the lump sum payment.

Regards,
Jennie Kingma
JK Business Systems Ltd, Hamilton, NZ
Email: jennie@jkbusiness.co.nz
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