
As the summer days become a memory, it signals the onset of a crucial period for payroll professionals in New Zealand. With the approaching new tax year on 1 April 2024, regulatory changes are set to impact payroll calculations across the country. Staying informed and getting prepared is essential.
In this article, we delve into these updates and provide four steps to help navigate the upcoming year-end period seamlessly, with Xero Payroll. Whether you’re a seasoned payroll manager or new to this all, arming yourself with this knowledge will be instrumental to maintaining accuracy and efficiency within your payroll operations.
There are four key changes in New Zealand payroll calculations coming up for the new tax year:
If you are paid… | Your student loan repayment threshold is… |
---|---|
Weekly | $464 |
Fortnightly | $928 |
Half-Monthly | $1,005.33 |
Four-weekly | $1,856 |
Monthly | $2,010.67 |
In Xero Payroll, the above rates are automatically applied to any pay runs with a payment date on or after 1 April. Your employees may see slight variations in their payslip.
With this in mind, below are some steps to get you smoothly through the year end period.
Make sure all your pay runs for the financial year have been posted. If you’re using payday filing through Xero, you’ll also need to make sure these have been filed. To make sure these pay runs are reported in the 2023 – 24 financial year, the payment date will need to fall on or before 31 March 2024.
Go to payroll settings to review all the information that impacts your payroll reporting. If anything is incorrect, you can update this before processing your first pay run for the new financial year. You can also take this opportunity to check that any final employee payments and changes have been put through.
You’re likely already regularly reconciling posted pay runs, but it’s always a great idea to run your eyes down reports like pay history and leave transaction reports to make sure there are no surprises. Here are some tips that may help:
Any errors made throughout the financial year (such as missed or incorrectly posted pay runs) can be corrected using an unscheduled pay run.
Simply create the pay run for the required period, and enter the adjustment amounts. These adjustments will be filed with Inland Revenue (IR). You can even enter negative values, if needed. If you do this, you will need to use myIR to manually adjust the returns for the employee. In myIR you can edit previously returned files, however, if the adjustment is for a period before the current tax period it might be worth contacting IR to discuss.
Once any amendments are made, check the payment date of the unscheduled pay run falls within the correct financial year, so it’s reported correctly.
That’s it! There should be nothing else you need to do to finalise payroll year end. Your payroll accounts should now be in good shape for the new financial year. Any pay runs with a payment date on or after 1 April 2024 will fall within the new financial year.
In the meantime, check out Xero Central for more information on how to prepare payroll for the new financial year. Our friendly support team is also available if you need a hand.
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