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NZ payroll tax updates too early

harper23

Hi seems the NZ tax changes happening from 31st July are already loaded onto payroll. I am doing pays today ending 30th July and the tax rates have changed. We cannot pay the new rates yet. How do I reverse the tax changes so our pays can be correct today.

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MYOB Business

Accepted answers

jenniek

Hi @harper23 is this MYOB Business Payroll? Was your payment date 31st July? If so, then the new tax rates do apply for all payment dates from 31st July - regardless of weekend ending date. So it may have been correct.

All comments

Brien

Hi - I checked with my accountant - yes it is from 31 July but as our next pay week starts on the 31st technically the previous pay week (ending 30th) should be at the old rates. As you say, the difference is minimal but I would rather my staff get a tax refund at the end of the year rather than have to pay. Done now anyway!

harper23

Hi, yes payment date 31st July and I processed it with the new rates, I did consider changing the date to 30th as Brien did, but it is not a significant amount, only $20 per employee if it is wrong at end of year tax round up

Bullswool

I'm not sure it's a muck-up, but maybe i'm wrong.

IRD website states "...people will see the extra pay in their payslips from 31 July." - your employees won't.

https://www.ird.govt.nz/pages/campaigns/personal-income-tax-threshold-changes

Which PAYE tax tables

Use the PAYE tax tables that apply on the day the PAYE income payment is made to your employees.

PAYE tables to use according to pay

Pay period ends	Employees paid on	PAYE tables to use
31 July 2024	30 July 2024	1 April 2024 to 31 July 2024
31 July 2024	31 July 2024	31 July 2024 onwards
1 August 2024	1 August 2024	31 July 2024 onwards

EDIT: I tired posting this info yesterday, but MYOB capped my allowable number of posts on this thread??

jenniek

Hi @Brien The new tax rates are effective from "Payment" date of 31st July - not week ending dates. So it is correct that new tax rates take effect in your payrun.

jenniek

Brien

Our payrun is the same period as you - just noticed the same thing! I have decided to discard the payrun and start all over again stating the pay date is 30 July - otherwise all the employees will be overpaid & potentially have tax to pay at the end of the financial year... Somehow I knew there would be some sort of muck-up with MYOB payroll - NOT GOOD!

harper23

Just noticed a band at the top of the payroll page Changes to Income and Independent earner tax credit (IETC) thresholds will be made automatically when the Date of payment is 31 July 2024 or later. So you were right, thanks

harper23

I would have thought it would apply to pays from 31st not being paid on 31st as now my staff will get a bonus week of tax reduction.

Bullswool

Probably yes. (but I am by no means an expert (i'm based in AU)).

The wording is odd in that it states: "thressholds apply from 31 July 2024..." i.e. last day of the month, rather than first day of new mont, but... it is what it is...

harper23

Our pay week is 24th - 30th pay on 31st. Aah so the tax changes are from 31st so that's why it has already changed for our pays?

Bullswool

Hi, Usually it's driven by pay date, not week ending date.

What date are the staff being paid?