April 2015 E Newsletter

Welcome

Our gorgeous summer weather continued into Easter which means we enjoyed our statutory holidays even more. Please read article relating to statutory holidays that have been Mondayised and other changes that have occured as of 1 April 2015.

Update on Various Rate Changes

Use of money interest
The use of money interest (UOMI) rates on underpaid and overpaid tax will increase on 8 May 2015. This is the first change to the UOMI rates in three years.

The new rates will be:

Underpayment rate: 9.21% (currently 8.40%).
Overpayment rate: 2.63% (currently 1.75%).

ACC levies
The average ACC work levy, paid by employers and those self-employed, decreased on 1 April 2015 to 90 cents per $100 of liable earnings (down from 95 cents). From 1 July 2015, the average ACC motor vehicle levy will reduce by around $135 a year.

Minimum wage
The adult minimum wage increased from $14.25 to $14.75 an hour on 1 April 2015. The starting out and training hourly wage.

Paid Parental Leave and Parental Tax Credits

Good news if you’re expecting!

From 1 April 2015, parental tax credits and paid parental leave entitlements have increased. Paid Parental Leave is designed to help working mothers when they take time off to care for a newborn. It is paid by the government, rather than your employer, and will now apply for 16 weeks for babies after 1 April 2015 (under the old rules, it applied for 14 weeks only).

If you are on salary or wages, or self-employed, your paid parental leave will now equal your normal pay up to a maximum of $504.10 before tax (previously, the maximum was $488.17 before tax). If you are self-employed, and have made a loss or earn less than minimum wage, you will receive $142.50 per week before tax. Please note that Paye, Kiwisaver and Student Loan deductions will be made from this amount, so please contact us if you would like us to help you calculate your actual payments.

Parental Tax Credit is another government-funded entitilement, also designed to help families with newborn babies. It has increased to $220 per week for 10 weeks for each baby born after 1 April 2015 (previously, it was $150 for the first 8 weeks). Parental tax credit is not available if the family income includes any income-tested benefit, student allowance, or NZ Super.

It is important to note that you can’t claim both Paid Parental Leave and Parental Tax Credits.

In most cases, you will receive a higher amount overall by claiming Paid Parental Leave, but if your usual income is less than $19,350 before tax, or if you are expecting three or more babies, or you are taking less than 16 weeks leave, then Parental Tax Credits may be more beneficial. Please contact us if you are expecting, and would like us to help you in this decision.

Changes to Benefit Allowances

Legislation enacted on 30 June 2014 clarifies when accommodation and employee allowances are non-taxable. Most of the new rules come into force from 1 April 2015 but employers who meet certain criteria may be able to apply some of the new rules from 1 January 2011. For detailed information about these changes, including examples on how to tax employer-provided accommodation, go to the "Allowances" section of the IRD website or see the Employer's guide (IR335).

Statutory Holiday Changes

From 1 January 2014 the public holiday for ANZAC Day and Waitangi Day will be “Mondayised” if they fall on a Saturday or Sunday.

This means, if Waitangi Day or ANZAC Day fall on a Saturday or Sunday:

For employees who would not otherwise work on that Saturday or Sunday, the public holiday must be treated as falling on the following Monday.

For employees who would otherwise work on that Saturday or Sunday, the public holiday must be treated as falling on that day.

The Holidays (Full Recognition of Waitangi Day and ANZAC Day) Amendment Act 2013 came into force on 1 January 2014, but will first have an effect in 2015 when ANZAC Day falls on Saturday 25 April.

Note: Celebration of Waitangi Day and ANZAC Day will still occur on the actual holiday date.