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Standard Elements

At iPayroll^® we maintain a number of Standard Payments, Deductions and Leave Codes for you. This greatly simplifies the work you have to do to set up and maintain your payroll, as we continually update this information to reflect changing requirements.

You can also create and maintain your own codes, to cater for any special payment, deduction or leave rules in your own organisation. However you should always double-check to see if a standard element does what you need first. Payrolls that use standard elements as much as possible are easier to maintain, and we can do more work for you if you use these standard codes.

Standard Elements - Detailed Help

- The Internet Payroll Service for New Zealand

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Standard Elements - New Zealand

At iPayroll^® we maintain a number of Standard Payments, Deductions and Leave Codes for you. This greatly simplifies the work you have to do to set up and maintain your payroll, as we continually update this information to reflect changing requirements.

You can also create and maintain your own codes, to cater for any special payment, deduction or leave rules in your own organisation. However you should always double-check to see if a standard element does what you need first. Payrolls that use standard elements as much as possible are easier to maintain, and we can do more work for you if you use these standard codes.

Standard Elements - Detailed Help

Please see the ACC Website for information about Accident Compensation.

ACC - Subsequent Weeks

Please see the ACC Website for information about Accident Compensation.

Alternative Holiday

The ALT transaction can be used to pay a person when they take leave that was previously credited to them for working on a Public Holiday. (See ALT-CR - Alternative Holiday Credit leave for crediting alternative holidays in the first place).

To enter ALT leave:-

1. Go to the person's timesheet
2. Enter the number of hours to Pay in the Quantity field
3. Select ALT from the list, and press the Add button.
4. Enter the date that the leave was taken.
5. Press the Save Changes button.

The person's Alternative Holiday Leave balance will be decreased to reflect this leave taken. Their Leave History will also be updated.

Reducing Ordinary Time Worked

If a person has a Timesheet Template containing their ordinary time, it can be tedious to reduce their time whenever leave is entered. To avoid this, select () the Reduce Ordinary Time (T1)? option when entering the leave details, and the person's Ordinary Time will be automatically reduced by the amount of leave taken.

Notes

• This option is selected by default for people with ordinary time on their Timesheet Template. If you enter the actual hours worked each pay you probably won't use this option, and it won't be automatically selected. You can always select or de-select this option as needed.

To record Alternative Holidays taken, use ALT - Alternative Holiday leave.

Opening Balances

If a person has an opening Alternative Holiday balance when you first set up your organisation, you can enter the figure on the person's Opening Balance page.

Annual Leave

Reducing Ordinary Time Worked

If a person has a Timesheet Template containing their ordinary time, it can be tedious to reduce their time whenever leave is entered. To avoid this, select () the Reduce Ordinary Time (T1)? option when entering the leave details, and the person's Ordinary Time will be automatically reduced by the amount of leave taken.

Notes

• This option is selected by default for people with ordinary time on their Timesheet Template. If you enter the actual hours worked each pay you probably won't use this option, and it won't be automatically selected. You can always select or de-select this option as needed.

Leave Pay Rates

Leave may be paid at a higher rate than the person's normal pay. The person's Leave Liable Earnings and Leave Liable Hours are calculated and stored each pay, and these figures are used to calculate the different Leave Pay Rates.

Tip: Refer to the Leave Pay Rates page for a person to see exactly what rate(s) Annual Leave may be paid at. Full details are available there. (See this Sample Leave Pay Rates).

Anticipated Annual Leave

People can take more Annual leave than they are entitled to. Their balance will be displayed as a negative figure, which will be highlighted to draw attention to this.

More Information

For more information please refer to managing Annual Leave.

Annual Leave (4 Weeks)

This entitlement provides for 20 days per annum annual leave, with a regular accrual each pay - at 8%. There is another standard code - AL-ENT - that provides for 15 days per annum. Please refer to that leave code for additional help.

Annual Leave (5 Weeks)

This entitlement provides for 25 days per annum annual leave, with a regular accrual each pay - at 10%. There is another standard code - AL-ENT - that provides for 15 days per annum. Please refer to that leave code for additional help.

Annual Leave Adjustment

For example, see MATTHEWS, John William in Angling Adventures (Demo):

Opening Leave Balances for MATTHEWS, John William

As at Date	Leave Type	Hours	Days	Rate	Amount
1-Apr-2002	Annual Leave (AL-ADJ)	20.00		$16.0000	$320.00
1-Apr-2002	Lieu Leave (LIEU-CR)	8.00		$16.0000	$128.00
1-Apr-2002	Sick Leave (SICK-ADJ)	16.00	2.00	$128.0000	$256.00
	2. Select a Leave Type... Annual Leave (AL-ADJ) Alternative Holiday (ALT-CR) days Bereavement Leave (BL-ADJ) days Lieu Leave (LIEU-CR) Sick Leave (SICK-ADJ) days				Add

Current Leave Balances

Leave Type	Outstanding Entitlement	Accrued	less Taken	Balance	History
Annual Leave	1420.00	92.31	1400.00	112.31	History...
Alternative Holiday days	-	-	-	0.00	History...
Lieu Leave	9.00	-	-	9.00	History...
Sick Leave days	57.00d	-	37.00d	20.00d	History...
Bereavement Leave days	-	-	1.00d	-1.00d	History...
Unpaid Leave	-	-	1.00	-1.00	History...

This entitlement provides for 15 days per annum annual leave, with a regular accrual each pay - at 6%. There is another standard code - AL20 - that provides for 20 days per annum (8%).

Note: If you have different entitlement rules, you can set up your own special leave entitlement codes and enter those against your people, instead of using the standard AL-ENT code. (You can even call your special code AL-ENT, which will override the standard rules).

Accrual and Anniversary Rollover

Every time you process a payroll for a person, they will receive an annual leave accrual of 6% of their Holiday Pay Liable earnings, and a proportion of the 15 day entitlement.

On each annual leave anniversary, a rollover is performed, giving the entitlement and starting a new accrual.

Example (with Links)

Forcing an Anniversary Rollover

Sometimes it may be necessary to perform a manual-rollover, because you require that the person receive an entitlement this pay rather than their next anniversary date as recorded in their balance. Note however that if you just want to adjust a person's balance, it is often easier to enter an AL-ADJ - Annual Leave Adjustment transaction instead.

To force a rollover, select the AL-ENT transaction on their timesheet (not their timesheet template), select the 'Start a New Leave Year (manual anniversary)' option and press the Save Changes button.

Tip: Then go to the person's Detailed Leave Balances to see exactly what the results of this rollover will be.

BANK Deduction

A BANK deduction takes all of a person's remaining pay (after tax and other deductions) and pays it into their bank account. You do not have to create BANK deductions yourself, they will be automatically added to a persons Standard Timesheet if they have a Payment Method of Bank (the other options are Cash or Cheque).

If a person wants a fixed amount each pay going to another bank account every pay, or has multiple bank accounts, you should use the PBA - Personal Bank Account deduction instead.

Your Bank Schedule shows all banking transactions for your current payroll.

Bank account numbers are checked using a 'check digit routine' supplied by each bank. Valid bank numbers are:-

Some people have their pay going to non-standard accounts, for example Credit Unions, PSIS or Credit Card accounts. These require some additional set-up. The bank account number to enter on their personal details page will be a holding account for the organisation, and their "account number" can be entered on the BANK transaction on the person's Standard Timesheet.

Pay to PSIS

Pay to American Express

Pay to ANZ Visa

Pay to ASB Visa

Pay to BNZ Visa and Mastercard

Pay to National Bank Visa

Pay to WestpacTrust Visa / Mastercard

Pay to KiwiBank

Backpays are calculated using the Extra Pay (Emolument) tax calculation, as they are a lump sum paid additionally to a person's usual pay. If you want to see the tax calculations applied to the backpay, select the 'Calculation Details' link in the timesheet menu.

Bereavement Leave

The BL transaction can be used to pay a person when they take Bereavement Leave. For information on Bereavement Leave Entitlement's refer to the Department of Labour's website.

To enter Bereavement leave:-

1. Go to the person's timesheet
2. Enter the number of hours to Pay in the Quantity field
3. Select BL from the list, and press the Add button.
4. Enter the date that the leave was taken.
5. Press the Save Changes button.

The person's Bereavement Leave balance will be decreased to reflect this leave taken. (Note that this will result in a negative value for their Bereavement Leave balance, which is expected). Their Leave History will also be updated.

Reducing Ordinary Time Worked

If a person has a Timesheet Template containing their ordinary time, it can be tedious to reduce their time whenever leave is entered. To avoid this, select () the Reduce Ordinary Time (T1)? option when entering the leave details, and the person's Ordinary Time will be automatically reduced by the amount of leave taken.

Notes

• This option is selected by default for people with ordinary time on their Timesheet Template. If you enter the actual hours worked each pay you probably won't use this option, and it won't be automatically selected. You can always select or de-select this option as needed.

For example, see MATTHEWS, John William in Angling Adventures (Demo):

Opening Leave Balances for MATTHEWS, John William

As at Date	Leave Type	Hours	Days	Rate	Amount
1-Apr-2002	Annual Leave (AL-ADJ)	20.00		$16.0000	$320.00
1-Apr-2002	Lieu Leave (LIEU-CR)	8.00		$16.0000	$128.00
1-Apr-2002	Sick Leave (SICK-ADJ)	16.00	2.00	$128.0000	$256.00
	2. Select a Leave Type... Annual Leave (AL-ADJ) Alternative Holiday (ALT-CR) days Bereavement Leave (BL-ADJ) days Lieu Leave (LIEU-CR) Sick Leave (SICK-ADJ) days				Add

Current Leave Balances

Leave Type	Outstanding Entitlement	Accrued	less Taken	Balance	History
Annual Leave	1420.00	92.31	1400.00	112.31	History...
Alternative Holiday days	-	-	-	0.00	History...
Lieu Leave	9.00	-	-	9.00	History...
Sick Leave days	57.00d	-	37.00d	20.00d	History...
Bereavement Leave days	-	-	1.00d	-1.00d	History...
Unpaid Leave	-	-	1.00	-1.00	History...

Bonus payments that you make irregularly, such as Christmas bonuses, are taxed at the lump sum rate and can be entered on a person's timesheet using the BON - Bonus (Irregular) code.

See Lump Sum Payments on the Inland Revenue website for more information.

Bonus (Regular)

Bonus payments that you make regularly, such as production or monthly bonuses, are taxed normally, are liable for Holiday Pay and can be entered on a person's timesheet using the BON2 - Bonus (Regular) code.

See Regular Bonuses on the Inland Revenue website for more information.

Cash Pays

A CASH deduction takes all of a person's remaining pay (after tax and other deductions) and pays it in cash. You do not have to create CASH deductions yourself, they will be automatically added to a persons Standard Timesheet if they have a Payment Method of Cash (the other options are Bank or Cheque).

Your Cash Schedule report will show the number of notes and coins of each denomination that you need to get from your bank to make cash pays for each person.

Schedule - Cash Pays

Angling Adventures (Demo)

Pay Day: 17-Feb-2012 (Friday)

Timesheet	Workplace	$100	$50	$20	$10	$5	$2	$1		Amount
There are no Cash payments in this payroll.
TOTAL		0	0	0	0	0	0	0		$0.00

Cash Pay Rounding

Cash pays are automatically rounded so that you don't have to handle small coins. This is achieved by advancing a small amount to the person each pay. This Cash Rounding is displayed on a persons Personal Details page (after their Payment Method), and is accounted for in the General Ledger Postings Report.

Note: It is your responsibility to make up your cash pays every pay period as iPayroll^® doesn't provide a cash handling service.

Cash-Up Annual Leave

Casual Holiday Pay 6%

Note: This payment should only be used for true casual staff, who are employed on a one-off or irregular basis with no commitment to future work. For fixed-term, short-term, irregular part-timers and other similar staff, normal Annual Leave rules are preferable. Those rules will accrue at 6%, and can be paid as Holiday Pay at end of employment or on an as-required basis. See AL-ENT and HP transaction help for more information.

To set up and pay Casual Holiday Pay:-

1. Go to the person's standard timesheet.
2. Enter 1.0 into the Quantity field
3. Select HP6 from the list
4. Press the Add button

(Note: If you already have a payroll open, you should repeat these steps in the person's timesheet in that payroll).

Including Holiday Pay in the Hourly Rate

Often organisations consider including holiday pay in a person's Hourly Rate, and employment contracts are occasionally seen with terms such as 'You will be paid $xx.xx per hour, inclusive of Holiday Pay'.

This is NOT recommended. There have been a number of court cases surrounding this issue, as people have gone back and claimed Holiday Pay on top of the money they had already received. In some cases they were successful. We recommend that, if casual staff are paid 6% each pay in the first place, that it is always set up as a separate HP6 transaction, so that it displays as a separate figure on the person's payslip each pay. It is then absolutely clear that Holiday Pay has been paid.

Casual Holiday Pay 8%

Note: This payment should only be used for true casual staff, who are employed on a one-off or irregular basis with no commitment to future work. For fixed-term, short-term, irregular part-timers and other similar staff, normal Annual Leave rules are preferable. Those rules will accrue at 8%, and can be paid as Holiday Pay at end of employment or on an as-required basis. See AL20 and HP transaction help for more information.

To set up and pay Casual Holiday Pay:-

1. Go to the person's standard timesheet.
2. Enter 1.0 into the Quantity field
3. Select HP8 from the list
4. Press the Add button

(Note: If you already have a payroll open, you should repeat these steps in the person's timesheet in that payroll).

Including Holiday Pay in the Hourly Rate

Often organisations consider including holiday pay in a person's Hourly Rate, and employment contracts are occasionally seen with terms such as 'You will be paid $xx.xx per hour, inclusive of Holiday Pay'.

This is NOT recommended. There have been a number of court cases surrounding this issue, as people have gone back and claimed Holiday Pay on top of the money they had already received. In some cases they were successful. We recommend that, if casual staff are paid 8% each pay in the first place, that it is always set up as a separate HP8 transaction, so that it displays as a separate figure on the person's payslip each pay. It is then absolutely clear that Holiday Pay has been paid.

Cheque Pays

You do not have to create CHEQUE deductions yourself, they will be automatically added to a persons Standard Timesheet if they have a Payment Method of Cheque (the other options are Bank or Cash).

Your Cheque Schedule report will show the details of every cheque that needs to be issued.

People with Child Support Deductions to Inland Revenue should have a CSD - Child Support Deduction entered against their Standard Timesheet. Inland Revenue will provide details of the amounts to deduct.

You Tax Remittances and Returns will automatically include all of the necessary details required by Inland Revenue.

Protected Earnings

Employees must be allowed to keep 60% of their net (after tax) earnings. This percentage is their protected net earnings to cover their living expenses. We automatically calculate the Child Support deduction to take care of this.

Inland Revenue has information about Child Support for Employers.

Court Fines

Fines and other Payments to the Ministry of Justice can be made using the CRTS - Courts - Ministry of Justice code.

Double Time

Also see T1 - Ordinary Time, T1.5 - Time and a Half, R2 - Overtime (Rate 2) and J2 - Second Job.

Expenses Reimbursement

Expense reimbursement payments are to compensate people for on-the-job expenses, are non-taxable. They can be entered on a person's timesheet using the EXP - Expenses Reimbursement code.

See Reimbursing allowances on the Inland Revenue website for more information.

Fixed Amount of Cash

FIXED-CASH is not used when a person has their remaining pay paid in Cash. They should have their Payment Method changed to Cash on their Personal File (see CASH).

To give a person some cash one pay:-

1. Add a FIXED-CASH deduction to their timesheet.
2. Enter the amount of cash to be paid to the person into the "Rate" box.

Your Cash Schedule report will show the number of notes and coins of each denomination that you need to get from your bank to make cash pays for each person.

Timesheet	Workplace	$100	$50	$20	$10	$5	$2	$1		Amount
There are no Cash payments in this payroll.
TOTAL		0	0	0	0	0	0	0		$0.00

Note: It is your responsibility to make up your cash pays every pay period as iPayroll^® doesn't provide a cash handling service.

GST Invoices/Remittances

The GST payment code can be used to pay GST registered people, and produce payment remittance advices or buyer created tax invoices (instead of payslips).

Follow these steps to pay a GST registered person and produce a remittance/invoice:-

1. Set the persons Tax Code to None on their Personal File.
2. Add a GST payment to their Standard Timesheet.
3. Select the GST transaction and choose the appropriate payslip format (Payment Remittance or Buyer Created TAx Invoice).
4. Enter payments on their Timesheet or Standard Timesheet (in the same way as standard employees).

The person's payslip will now be displayed in the selected format, which includes the extra details required for Tax Invoice purposes.

• When they are to be paid Holiday Pay, enter a HP transaction as described above.
• If they receive a part-payment of Holiday Pay, record it as described above.
• If they take Annual Leave, record it as normal (see AL).
• If they complete 12 months, they will have a leave rollover. Their Holiday Pay will be converted into an Annual Leave entitlement - as per the Holiday Pay Act.
  Note: Even though the holiday pay has been converted into an entitlement, it can still be paid as Holiday Pay - Entitled (see HP-ENT).
• When the person finishes, pay their Holiday Pay as per the normal Final Pay instructions.

Note: This code is no longer used - it is superseded by the provisions of the Holidays Act 2003.

The HP-ENT transaction will be created for you automatically when you follow the instructions for a person's Final Pay.

Job 2

Job 2 (J2) can be entered on peoples timesheets to pay time worked at the person's Rate 2. This is usually used when people's employment contracts specify a special rate payable for specific duties (not overtime - See R2 - Overtime (Rate 2)).

To set up a fixed secondary rate against a person, go to their personal details, scroll down to the 'Pay Rates' section, press the 'More >>' button, and enter the appropriate rate.

For example, Press the 'More >>' button to see additional rates for MATTHEWS, John William in Angling Adventures (Demo):-

Pay Rates

Pay Rate:		per hour per annum pa (Govt:14/365th's) pa (Aust:12/313th's)	(16.0000 per hour)
F.T.   Hrs/Week:		(2080.0 per year)	More Pay Rates >> Less <<

Rate 2:		per hour per annum pa (Govt:14/365th's) pa (Aust:12/313th's)
Rate 3:		per hour per annum pa (Govt:14/365th's) pa (Aust:12/313th's)
Rate 4:		per hour per annum pa (Govt:14/365th's) pa (Aust:12/313th's)
Rate 5:		per hour per annum pa (Govt:14/365th's) pa (Aust:12/313th's)
Extra Rate:

Also see T1 - Ordinary Time, R2 - Overtime (Rate 2),

Note: J2 is set up so that it reports as Ordinary Time in the payroll reports. R2 has a similar set up, except it reports as Overtime Worked.

Rate 3, Rate 4 and Rate 5

These additional rates are also available. However we have not set up any standard payments to calculate using these rates (simply because most organisations won't need them).

If you want to use Rate 3, Rate 4, and / or Rate 5, you will need to set up a special payment

KiwiSaver contributions

The KSR - KiwiSaver Employer Contribution code is used to record KiwiSaver contributions made by the employer, additional to a person's pay.

To change a person's KiwiSaver employer contribution rate, enter the appropriate percentage into the Employer field on their Personal Details page. This will automatically update their Standard Timesheet.

iPayroll^® will pass all relevant details onto Inland Revenue for you.

More Information

• See KiwiSaver for details on managing a person's KiwiSaver details.
• See KSE - KiwiSaver for employee deductions.
• See Organisation Defaults for default automatic enrolment rates.
• See KiwiSaver for employers on Inland Revenue's web site.

The KSE - KiwiSaver code is used to record KiwiSaver deductions made from a person's pay.

To change a person's KiwiSaver deduction rate, enter the appropriate percentage into the Employee field on their Personal Details page. This will automatically update their Standard Timesheet.

iPayroll^® will pass all relevant details onto Inland Revenue for you.

More Information

• See KiwiSaver for details on managing a person's KiwiSaver details.
• See KSR - KiwiSaver Employer Contribution for employer contributions.
• See Organisation Defaults for default automatic enrolment rates.
• See KiwiSaver for employers on Inland Revenue's web site.

For information about Holiday Pay accruals for periods of Leave without Pay, see the Parental Leave section.

Ordinary Time

Your Payroll Hours report summarises all Hours paid, including Ordinary Time worked, in your current payroll.

Timesheet	Home Cost Centre	Workplace	Ord. Time	Over Time	Penal Time	Annual/ Lieu/RDO	Sick/ ACC	Other Leave	Total Hours
MATTHEWS, Christine (Chrissy)	1000	Arrowtown	40.00						40.00
MATTHEWS, John William	2000	Queenstown	40.00						40.00
TOTAL			80.00	0.00	0.00	0.00	0.00	0.00	80.00

To record Time in Lieu taken, use LIEU - Leave in Lieu leave.

Opening Balances

If a person has an opening Leave in Lieu of Overtime balance when you first set up your organisation, you can enter the figure on the person's Opening Balance page.

Overtime in Lieu Leave

The LIEU transaction can be used to pay a person when they take leave that was previously credited to them as Overtime in Lieu. (See LIEU-CR - Credit Time in Lieu of Overtime leave for crediting time in lieu in the first place).

To enter LIEU leave:-

1. Go to the person's timesheet.
2. Enter the number of hours to Pay in the Quantity field.
3. Select LIEU from the list, and press the Add button.
4. Enter the date that the leave was taken.
5. Press the Save Changes button.

The person's Lieu Leave balance will be decreased to reflect this leave taken. Their Leave History will also be updated.

Reducing Ordinary Time Worked

If a person has a Timesheet Template containing their ordinary time, it can be tedious to reduce their time whenever leave is entered. To avoid this, select () the Reduce Ordinary Time (T1)? option when entering the leave details, and the person's Ordinary Time will be automatically reduced by the amount of leave taken.

Notes

• This option is selected by default for people with ordinary time on their Timesheet Template. If you enter the actual hours worked each pay you probably won't use this option, and it won't be automatically selected. You can always select or de-select this option as needed.

Tax is calculated in accordance with Inland Revenue's Payroll Specifications for the period from 1-Apr-2011 to 31-Mar-2012. (Also see SLD for Student Loan information).

• ACC Earner Levy is paid at the rate of $2.04 per $100.00 to a maximum of $2,278.04. (ACC Annual Income Maximum $111,669.00)
• Extra Pays (Emoluments) are taxed at: 30.0% (High) 17.5% (None) 33.0% (Top) .
  The rate used depends on the employees earnings in the last 28 days (by looking up the payroll history and multiplying the result by 12 for a monthly paid person, 13 for other people).
• Withholding Tax (tax code WT) is taxed at the Special Tax % on the persons Personal File.
• School Students with weekly earnings of less than $45.00 ($2,340 p.a.) should be given a tax code of 'None'. No PAYE will be deducted and they will not appear on the returns to Inland Revenue.
• GST Registered Persons should be given a tax code of 'None' and a GST transaction. See GST Help for more details.
• People with a Special Tax Code (or IR 23 form) will have a tax code of 'STC' and a Special Tax % and Special Earner Levy % on their Personal File. (The tax code may be different if they have only a special Student Loan amount. See SLD Help).

Tax Adjustments

If you enter pay adjustments (for example -40.00 hours Ordinary Hours to recover a weeks pay that was overpaid to a person), the correct tax will be calculated for you and the all of the appropriate entries will be made for you on the various returns to Inland Revenue (see Tax Administration).

Taxing Multiple Pay Periods

You can calculate tax for more than one pay period by simply adjusting the quantity on the PAYE timesheet transaction. See Advances for more details.

Superannuation Subsides taxed as Salary

Refer to Tax Administration for this topic.

Tax Codes

Tax is calculated for these tax codes:-

Payment Frequencies supported by the tax calculation are :-

• 4-Weekly
• 4-Weekly (2)
• Bi-Monthly
• Bi-Monthly (2)
• Fortnightly
• Fortnightly (2)
• Monthly
• Monthly (2)
• Weekly
• Weekly (2)

Your Bank Schedule will include all PSIS payments, and they are also itemised in your Deduction Schedule

Payment to Organisation

It can be used for Recovering Overpayments, or any other time that you require a person to pay a total amount, for example loan repayments.

Personal Bank Accounts

A PBA deduction pays a fixed amount into a person's bank account. (This is not used for a person's 'remaining pay' where all of their pay after other deductions is paid into an account. It is only used for fixed amounts).

Use this deduction for people with multiple bank accounts.

A person can have several PBA transactions on their timesheet, if they have money paid into several different bank accounts. PBA transactions are usually entered on a persons Standard Timesheet, so they happen every pay. However you can easily add or change a PBA when entering timesheets, to make a payroll payment, and it will only affect that individual payroll.

Your Bank Schedule shows all banking transactions for your current payroll.

For a list of recognised banks, and additional information, refer to the Bank help.

Public Holiday (not Worked)

Payment to a person for a Public Holiday (when they don't work on the day) may be made using the standard PH - Public Holiday (not Worked) code.

PH calculates using the Relevant Leave Rate. It is acceptable to continue paying the person their normal T1 salary rather than using the PH code, as long as this does not disadvantage the person.

Note: If a person works on a Public Holiday they are due a minimum of Time and a Half plus a full Credit for Alternative Holiday. code.

Public Holiday Worked

When a person works on a Public Holiday they are entitled to be paid at Time-and-a-Half rates. These payments should be entered using the PHW - Public Holiday (Worked) code.

Additionally, people are entitled to a full Alternative Holiday Credit (even if they only work part of the day). This should be entered using the ALT-CR - Credit for Alternative Holiday code.

Rate 2

For example, Press the 'More >>' button to see additional rates for MATTHEWS, John William in Angling Adventures (Demo):-

Pay Rates

Pay Rate:		per hour per annum pa (Govt:14/365th's) pa (Aust:12/313th's)	(16.0000 per hour)
F.T.   Hrs/Week:		(2080.0 per year)	More Pay Rates >> Less <<

Rate 2:		per hour per annum pa (Govt:14/365th's) pa (Aust:12/313th's)
Rate 3:		per hour per annum pa (Govt:14/365th's) pa (Aust:12/313th's)
Rate 4:		per hour per annum pa (Govt:14/365th's) pa (Aust:12/313th's)
Rate 5:		per hour per annum pa (Govt:14/365th's) pa (Aust:12/313th's)
Extra Rate:

Also see T1 - Ordinary Time, T1.5 - Time and a Half, T2 - Double Time and J2 - Second Job).

Note: R2 is set up so that it reports as Overtime Worked in the payroll reports. J2 has a similar set up, except it reports as Ordinary Time.

Redundancy

Redundancy payments can be entered on a person's timesheet using the RED - Redundancy Payment code.

Redundancy payments are automatically taxed as Extra Pay (Emolument) and excluded from Earner Premium and Employer ACC Levies.

See Redundancy Payments on the Inland Revenue website for more information.

Sick Entitlement

Note: If you have different entitlement rules, you can set up your own special leave entitlement codes and enter those against your people, instead of using the standard SICK-ENT code.

Anniversary Rollover

On a leave anniversary, a rollover occurs. Any unused leave is discarded and a new entitlement is given.

Example (with Links)

To record Unpaid Sick Leave, use SICK-LWOP instead. (Alternatively, you could simply reduce the number of Paid hours and not record any leave).

Reducing Ordinary Time Worked

If a person has a Timesheet Template containing their ordinary time, it can be tedious to reduce their time whenever leave is entered. To avoid this, select () the Reduce Ordinary Time (T1)? option when entering the leave details, and the person's Ordinary Time will be automatically reduced by the amount of leave taken.

Notes

• This option is selected by default for people with ordinary time on their Timesheet Template. If you enter the actual hours worked each pay you probably won't use this option, and it won't be automatically selected. You can always select or de-select this option as needed.

More Information

For more information please refer to managing Sick Leave.

Sick Leave Adjustment

You can also enter an SICK-ADJ transaction on a person's timesheet to alter their leave balances. The only time you should really need to do this is if you have picked up an error in the person's balance. (Note, if you want to anticipate Sick Leave, you can just use the SICK transaction. No special adjustments are required).

Example

For example, see MATTHEWS, John William in Angling Adventures (Demo):

Opening Leave Balances for MATTHEWS, John William

As at Date	Leave Type	Hours	Days	Rate	Amount
1-Apr-2002	Annual Leave (AL-ADJ)	20.00		$16.0000	$320.00
1-Apr-2002	Lieu Leave (LIEU-CR)	8.00		$16.0000	$128.00
1-Apr-2002	Sick Leave (SICK-ADJ)	16.00	2.00	$128.0000	$256.00
	2. Select a Leave Type... Annual Leave (AL-ADJ) Alternative Holiday (ALT-CR) days Bereavement Leave (BL-ADJ) days Lieu Leave (LIEU-CR) Sick Leave (SICK-ADJ) days				Add

Current Leave Balances

Leave Type	Outstanding Entitlement	Accrued	less Taken	Balance	History
Annual Leave	1420.00	92.31	1400.00	112.31	History...
Alternative Holiday days	-	-	-	0.00	History...
Lieu Leave	9.00	-	-	9.00	History...
Sick Leave days	57.00d	-	37.00d	20.00d	History...
Bereavement Leave days	-	-	1.00d	-1.00d	History...
Unpaid Leave	-	-	1.00	-1.00	History...

Student Loan deductions are made at a rate of 10.0% once the threshold of $19,084.00 per annum has been reached. This applies to the tax year from 1-Apr-2011 to 31-Mar-2012. (Also see PAYE for more tax information).

Special Tax Certificates (IR 23 Form)

If a person has a special tax certificate (an IR 23 form), they may be paying student loan at a different rate. The IR 23 will show that Student Loan is to be deducted at a specified rate for each dollar of gross income. Enter that rate (for example 15.0) in the Special Student Loan % box in the persons Personal File.

The person's tax code will be M SL, S SL or SH SL (or STC if the person also has a special tax rate for PAYE).

Deducting a Fixed Amount for Student Loan

Although Inland Revenue expects people to deduct student loans at a particular percentage rate, some people pay a fixed amount off their Student Loan each pay period.

To deduct a Fixed Amount of Student Loan each pay period, go to the person's Standard Timesheet and select the 'SLD - Student Loan' transaction. Enter the fixed amount into the 'Rate' box. This will override the normal Student Loan calculation and deduct that amount each pay.

Student Loans on Extra Pay (Emolument)

If a person receives an Extra Payment, Student Loan will be calculated on as Extra Pay too. Extra Pays involve a second tax calculation, and the student loan amount on the payslip can be found by adding the student loan that would normally be deducted to the student loan calculated for the overpayment. See the Calculation Details screen for a timesheet if you need to understand exactly how the amount was calculated.

Student Loan Threshold

Student Loan deductions are not made until the threshold is reached (currently $19,084.00 per annum). The threshold is not applied when:-

• the person has a special student loan % (IR 23).
• calculating Student Loan on an Extra Pay.
• Using a Fixed Amount for Student Loans (see above).
• the person has a tax code of S SL, SH SL or ST SL.

Time and a Half

Also see T1 - Ordinary Time, T2 - Double Time, R2 - Overtime (Rate 2) and J2 - Second Job.

Unpaid Sick Leave

To enter SICK-LWOP:-

1. Go to the person's timesheet
2. Enter the number of hours to Pay in the Quantity field
3. Select SICK-LWOP from the list, and press the Add button.
4. Enter / check the Number of Days taken
   (This extra information is required for part time staff where details of their exact working patterns aren't recorded).
5. Enter the date and reason that the leave was taken and press the Save Changes button.

1. Recording SICK-LWOP will not change the Sick Leave taken figure recorded for the person.
2. When recording Sick Leave Without Pay, you may also have to adjust the number of Ordinary Time hours (T1) on the person's timesheet to have the correct pay calculated - see below.

Reducing Hours Worked:- Recording Sick Leave without Pay is optional but recommended -- you can achieve the same pay by just reducing the time recorded on the person's timesheet. The advantages of recording Sick Leave without Pay are that you have a complete record of all absences in the person's Leave History, and that the person receives a more explanatory payslip.

Reducing Ordinary Time Worked

If a person has a Timesheet Template containing their ordinary time, it can be tedious to reduce their time whenever leave is entered. To avoid this, select () the Reduce Ordinary Time (T1)? option when entering the leave details, and the person's Ordinary Time will be automatically reduced by the amount of leave taken.

Notes

• This option is selected by default for people with ordinary time on their Timesheet Template. If you enter the actual hours worked each pay you probably won't use this option, and it won't be automatically selected. You can always select or de-select this option as needed.

More Information

For more information please refer to managing Sick Leave.

Withholding Tax

Please refer to Inland Revenue for specific activities and Withholding Tax Rates.

Withholding Tax Deductions for people with PAYE

You can make ad-hoc payments with Withholding Tax deducted to people with standard PAYE tax codes.

(This is an unusual situation, but sometimes directors fees are paid to employees with withholding tax deducted, instead of treating them as standard taxable payments).

To deduct Withholding Tax when people are on PAYE:-

1. Set up a special payment code as an allowance Extra Emolument / WT (No ACC Earner Premium).
2. Enter the timesheet, including the extra payment that has withholding tax deducted.
3. Enter a WT transaction, putting the WT percentage into the Quantity field.

This will correctly separate the person's PAYE and WT on the relevant Inland Revenue reports.

Work and Income

Payments to Work and Income can be made using the WINZ - Work and Income code.

iPayroll ® Giving

Your employees can manage their own Donations via their Payslip Kiosk.

Employees making Payroll Giving donations receive an immediate tax credit (at 33%) in the same pay as the donation is made. There is no need to collect receipts and claim a refund from IRD at the end of the year.

Read more about Payroll Giving at Inland Revenue.

iPayroll's Processing Fees

• Every time you process a payroll with us, you are charged our current processing fees. These fees are included in the payroll's banking files, you do not have to pay them separately.
• We issue an invoice, which you view and print like any other report. (A sample is shown below).
• As a business expense, our fees are fully tax deductible.
• All fees are in New Zealand dollars and exclude GST.
• Our current fees are:
  • A one-off setup fee of $50.00 and $10.00 per person to set up an organisation and the initial loading of employees.
    This is charged when you confirm your first payroll.
  • A flat $7.75 per week per payroll processed. (i.e. You will be charged $7.75 per week if you have a weekly payroll, $15.50 per fortnight if you have a fortnightly payroll, or $33.60 per month if you have a monthly payroll).
  • $1.75 per person paid in that payroll.
  • We also pass on bank transaction fees.
    Note: If you transmit your own bank file we don't incur this charge for each individual person paid and we will only charge for any transactions that go into our bank account. (Your bank will charge their usual bank transaction fees directly to you).
• If you choose to let us manage your tax, there are no additional fees for these services. (You can read more about managing tax).
• Rebate applied by iPayroll^® Ltd. Only applicable to qualifying organisations approved by the Inland Revenue Department as Small Employers with a tax frequency of one return per month.
• Multiple Users (after the first two) incur additional fees.
• Other fees may be charged for additional services. For example, data entry services, ad-hoc training services, or additional implementation services.

Sample Invoice

- The Internet Payroll Service for New Zealand

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- The Internet Payroll Service for New Zealand

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