GPNZL: Global Payroll New Zealand Legislative Changes for Tax Year 2022-2023 (Doc ID 2853896.1)

The Inland Revenue Board of New Zealand has provided regulations for employers for Payroll Calculations & Business Rules Specification for the tax year 2023.

Details

Rate Updates and Legislation Changes

1) ACC Earners’ Levy

On 24 November 2021, Cabinet considered the 2022/23 ACC levy rates and agreed:

 To set the Earners’ Account Average levy rate per $100 of liable earnings (incl. GST) at $1.46

 To increase the maximum liable earnings that self-employed and businesses pay Work Account levies on as outlined below:

Details 2021/22 (from) 2022/23 (to)

Employees and private domestic workers (Work and Earners’ Accounts) $130,911 $136,544

Self-employed people (Work and Earner’s Accounts) $130,911 $136,544

 To increase the minimum liable earnings that self-employed people pay Work and Earners' levies on to $42,465 in 2022/23.

Note: While Cabinet has approved these rates, they are still subject to Order in Council. Once announced, ORACLE will update the details.

2) Student Loan Deduction Rates and Thresholds Effective from 1st of April 2022 the student loan repayment threshold has increased to $21,268 for the 2022/23 tax year.

3) New option for calculating fringe benefit tax (FBT)

For the 2021-22 and later income years, a new Pooled Alternate Rate option for calculating fringe benefit tax (FBT) is proposed. Under this proposed option, employers will pay FBT at the rate of 63.93% only for those employees with all-inclusive pay of $129,681 or more. FBT will be payable at the rate of 49.25% for all employees with all-inclusive pay under $129,681.

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PRP posted, Click here to download

Negative Prior Period Adjustments:

From 28 October 2021, the prior period adjustment fields in the Employment information (‘Prior period gross adjustments’ and ‘Prior period PAYE adjustments’) will accept negative values. However, any negative amounts entered cannot be more than the corresponding amounts in the ‘Gross earnings and/or scheduler payments’ field and ‘PAYE / tax’ field for the line item. I.e. The line can be reduced to zero, but not below

Oracle: The Gross and PAYG Prior Period Adjustments fields were already delivered as part of PDR2. The system prints Prior Period Adjustment fields as zero (0) as these are not derived from any delivered element in the system. Kindly be aware that as per the recent change employers can now also input negative values in these fields and any negative amounts entered cannot be more than the corresponding amounts in the ‘Gross earnings and/or scheduler payments’ field and ‘PAYE / tax’ field for the line item.

Tax code lines record (TED) validation: As of 2 February 2022, a Tax code line record (TED) must be included when sending an Employee details line record (DED). If a TED is not included, a validation error will be returned for the file. 

Oracle: This is already part of the PDR2 solution delivered. Currently when you generate the PDR file, a TED record follows a DED record in the file. There is no changes required to be made for this.

Exclude ESS from Total Gross Earnings value: The sum of the gross earnings for all employees for the payday being reported as calculated from Employer pay records. Do not include Employee Share Scheme payments in this field.

Oracle: This is already part of the PDR2 solution delivered. Currently the "Total Gross Earnings" does NOT include the ESS payments, which are reported in separate fields.

Child support code

Oracle: All the codes are already part of the PDR2 solution delivered. And there are no additional changes we observed after detail analysis.