22nd March, 2018

What compliance changes are coming in 2018/19?

The new financial year is almost upon us, and with it comes a number of tax and legislative changes that you need to be ready for.

If you’re using an online payroll solution like our Essentials Payroll, you don’t need to worry as we update the software automatically.

For those running a desktop payroll solution, you need to make sure that your software is updated so that you have the correct tax calculations and remain compliant.

The changes you need to know about

Changes coming into effect on 1 April 2018

There are ACC threshold, ACC levy and student loan repayment threshold changes coming into effect for the 2018-2019 financial year. They are:

  • The annual ACC threshold increases from $124,053 to $126,286
  • The maximum ACC levy increases from $1,724.33 to $1,755.37
  • The annual student loan repayment threshold for 2018/-2019 is $19,448

C-series paper-based reporting will not be supported from 17 April 2018

C-series is a paper Employer Monthly Schedule (EMS) that is generated by software and then mailed to Inland Revenue. C-Series EMS will no longer be supported from 17 April 2018. Employers will need to file their Employer Monthly Schedule (IR348) online through the Inland Revenue website. If you need to submit an amendment to this form, you’ll need to file the amendment online as well.

Protected Net Earnings

Inland Revenue has also clarified how Protected Net Earnings should be calculated. Employees are entitled to keep 60 percent of their net pay after compulsory deductions. This is called Protected Net Earnings (PNE). Protected Net Earnings only apply to child support deductions and District Court attachment orders, not to voluntary deductions.

Minimum wage increase

The minimum wage rates are reviewed by the government each year and in 2018 an increase is being introduced from 1 April. The minimum wage will increase from $15.75 to $16.50. Further increases are planned to increase minimum wage to $20 by 2021.

READ: How to not just survive from the minimum wage increase, but thrive

NSW tax code holders

For workers with the NSW tax code (seasonal workers and foreign fishing workers), the tax calculation on their extra pays will continue to have a flat rate of 10.5 percent.

ND Tax holders

Workers with an ND tax code (no notification tax code, for employees on a salary or wage that have not completed a Tax Code Declaration – IR330) will now be taxed for extra pay.

Extension of paid parental leave

The extension of paid parental leave is to provide more support to working families with newborns and young children. The Parental Leave and Employment Amendment Bill was passed in November 2017.

It increases the duration of parental leave payments from 18 to 22 weeks from 1 July 2018, with a further increase to 26 weeks from 1 July 2020.

There’s also an increase in Keeping in Touch days from 40 to 52 hours from 1 July 2018, with a further increase to 64 hours from 1 July 2020.

These allow parents to do limited work while on parental leave e.g. attend a team day, annual planning or change announcement.

This is to help workers who are away from their workplace for a longer period to still maintain contact with their employer and keep up to date with any changes, and for the employer to continue to be connected with their employee.