HR Facts

HR Facts

It is important to ensure you are meeting your obligations as an employer by keeping up with legislative changes and staying abreast of the key facts that will affect your business and employees. Our HR specialists have collated everything you need to know so you have it all at your fingertips.

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Individual income tax rates

Income

Rate
0 - 14,000 10.5%
14,001 - 48,000 17.5%
48,001 - 70,000 30%
70,001 - 180,000 33%
Over 180,000 39%

 

Student loans

The repayment threshold is currently $20,280 a year (or $390 per week), with the repayment rate at 12%.

Repayment holidays are up to 12 months in length for borrowers who go overseas and apply for one. Losses cannot be used against income to reduce liability for student loan repayments.

Employer Superannuation Contribution Tax (ESCT)

ESCT is deductible from employer contributions to superannuation schemes, including employer contributions to KiwiSaver.

 

Income plus Superannuation Contributions

Rate

0 - 16,800 10.5%
16,801 - 57,600

17.5%

57,601 - 84,000 30%
84,001 - 216,000 33%
Over 216,000 39%
KiwiSaver Contributions
  Rate
Employee contribution 3, 4, 6, 8 or 10%
Employer contribution 3%

Member tax credit

50c for each $1 contributed by a member, to a maximum of $521.43

Fringe Benefit Tax (FBT) Rates

Quarters 1 to 3

Quarter 4

63.93% (single rate) 63.93% (single rate) or the alternate rate calculation (see below)
49.25% (alternate rate)

alternate rate calculation (see below)

 

The alternate rate calculation applies the following rates:

Income plus Fringe Benefits

Rate

0 - 12,530 11.73%
12,531 - 40,580 21.21%
40,581 - 55,980 42.86%
55,981 - 129,680 49.25
Over 129,680 63.93%
Motor Vehicles Kilometre Rate

Available options are:

  • The Inland Revenue kilometre rate for motor vehicles
  • Other published kilometre rates (e.g. AA rates)
  • Actual costs

Latest Inland Revenue kilometre rates (per kilometre) are:

Vehicle Type

First 14,000 kms

After 14,000 kms

Petrol or diesel 79 cents 27 cents
Petrol hybrid 79 cents 16 cents
Electric 79 cents 9 cents
Withholding Tax on Schedular Payments & Payments to Non Resident Contractors

 

Rate

Minimum rate for residents 10%
Minimum rate for non-residents 15%
Non-resident entertainers 20%
IRD number not supplied (Company) 20%
IRD number not supplied (Individual) 45%

Schedular payments are payments for specific activities such as directorships, labour hire firm contractors, actors and commission sellers.

Recipients are able to choose their rate on the filing of an IR330C provided it is greater than the minimum rates above. Default rates apply where a rate is not chosen.

Rates for non-residents can apply to non-resident contractors performing services of any kind. Exemptions are available in some situations.

Paid Parental Leave

Paid parental leave (PPL) is a government-funded entitlement paid to eligible primary carers and adoptive parents when they take parental leave from their job(s) to care for their new-born or adopted child under the age of six.

These payments go towards the loss of income that primary carers and adoptive parents experience when they take this parental leave.

 

How much are PPL payments:

For employees PPL payments equal your normal pay up to a current maximum of $606.46 a week before tax.

For self-employed persons PPL payments equal your average weekly earnings up to a current maximum of $606.46 a week before tax. If the self-employed person makes a loss or earns less than the minimum wage, for at least 10 hours work a week, the payment is $200 each week before tax. This is equivalent to 10 hours each week at the current minimum wage rate.

 

How long can the employee receive PPL payments for:

If the eligible employee has a baby or adopts a child under the age of six, then the employee can receive PPL payments for a maximum of 26 weeks.

 

How PPL is paid:

Inland Revenue will pay PPL payments directly into the employee’s bank account each fortnight. The payments will be treated as income, just like normal salary and wages or self-employed income. PPL payments have tax and student loan deductions taken out (at the rate applies to the employee). It will not have earners’ levy deducted from it.

Employees can work limited Keeping in Touch (KIT) hours during their PPL without losing their entitlement. Employees can work up to 64 hours over the parental leave term, as long as it is not within the first 28 days after the child is born.

2022 School Holidays

2022 school term dates for most New Zealand primary, intermediate and secondary schools.

 

Term 1 2022

  • Starts between Monday 31 January (at the earliest); and Tuesday 8 February (at the latest)
  • Ends Thursday 14 April

 

Term 2 2022

  • Starts Monday 2 May
  • Ends Friday 8 July

 

Term 3 2022

  • Starts Monday 25 July
  • Ends Friday 30 September

 

Term 4 2022

  • Starts Monday 17 October
  • Ends no later than Tuesday 20 December

 

Contact your school to check:

http://www.educationcounts.govt.nz/find-school

 

School and Public Holidays

School terms and holidays:

https://www.education.govt.nz/school/school-terms-and-holiday-dates

2022 Public Holidays

Actual date

Observed

New Year’s Day

1 January

Saturday 1 January or Monday 3 January 2022

Day after New Year’s Day

2 January

Sunday 2 January or Tuesday 4 January 2022

Waitangi Day

6 February

Sunday 6 February or Monday 7 February 2022

Good Friday

Varies

Friday 15 April 2022

Easter Monday

Varies

Monday 18 April 2022

ANZAC Day

25 April

Monday 25 April 2022

Queen’s Birthday

1st Monday in June

Monday 6 June 2022

Matariki

Varies

Friday 24 June 2022

Labour Day

4th Monday in October

Monday 24 October 2022

Christmas Day

25 December

Sunday 25 December or Tuesday 27 December 2022

Boxing Day

26 December

Monday 26 December 2022

The Anniversary Day of the Province in which an employee works is observed as follows:

Province

2022

Wellington

Monday 24 January

Auckland

Monday 31 January

Northland 

Monday 31 January

Nelson

Monday 31 January

Taranaki

Monday 14 March

Otago

Monday 21 March

Southland

Tuesday 19 April

South Canterbury

Monday 26 September

Hawke’s Bay

Friday 21 October

Marlborough

Monday 31 October

Canterbury

Friday 11 November

Westland

Monday 28 November

Chatham Islands

Monday 28 November

New Zealand Public Holidays 2022

https://www.employment.govt.nz/leave-and-holidays/public-holidays/public-holidays-and-anniversary-dates/

Key New Zealand Employment Legislation
  • Employment Relations Act 2000
  • Equal Pay Act 1972
  • Holidays Act 2003
  • Health and Safety at Work Act 2015
  • Human Rights Act 1993
  • Injury Prevention, Rehabilitation & Compensation Act 2001
  • Minimum Wage Act 1983
  • Parental Leave and Employment Protection Act 1987
  • Privacy Act 2020
  • Protected Disclosures Act 2000
  • Wages Protection Act 1983

See http://www.legislation.govt.nz for more information.

Employment Agreements

What an Employment Agreement must include:

Employer & Employee

Your name and your employee’s name as you are both ‘parties’ to the employment agreement

Position

The position which the employee is employed in (e.g. Sales Manager)

Type of Work

If the employee is working in a permanent, fixed-term or casual capacity

Duties

The type of work required as part of the job (e.g. taking orders, reception work)

Place of Work

Where the employee will be required to work

Working Hours

The agreed hours or an indication of the hours the employee will work

Payment of wages

Must be equal or greater than the relevant minimum wage and include if an hourly rate or salary, how they are paid and over what period

Public Holidays

State if the employee can decline to work, must work or be on call, including compensation for working or being available;

that the employee will be paid at least time-and-a-half for any time worked on a public holiday

Resolving Employment Relationship Problems

An explanation of the steps that should be taken to deal with workplace problems if they happen

Employee Protection Provision

What process the employer will follow in restructuring situations

Employee Acknowledgement

Acknowledgement that the employee has read, understood and agrees to the terms and conditions of the agreement

Other matters

Any other matters agreed upon, such as trial periods, probationary arrangements or availability provisions. A plain language explanation of the services available for the resolution of the employment relationship problems, including reference to the period of 90 days under section 114 in which a personal grievance must be raised

 

Note: Failure to have a written IEA (Individual Employment Agreement) or failure to retain a copy, may result in a penalty of up to $10,000 for individuals or $20,000 for companies. This is for each breach, so the penalty could be imposed for each employee who does not have a compliant agreement. From 6 May 2019, an employer’s failure to have a compliant written IEA for each employee allows the Ministry of Business, Innovation and Employment to issue an infringement notice which will have an infringement fee of $1,000.

Minimum wage

The current minimum wage rate (before tax) is $20.00 per hour and applies to employees aged 16 years or over.

Health and Safety

The Health and Safety at Work Act 2015 outlines that businesses are responsible for the health and safety of their employees and any others impacted by their work. More information on this primary duty of care and other key facts can be found on the WorkSafe website: http://www.business.govt.nz/worksafe.

Disclaimer

We have made every effort to ensure that the information provided in this publication is accurate as at 01 October 2021. However, this publication should not be relied upon as professional advice.

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