Novopay Newsletter 9 May 2016

News for School Payroll Staff


It's term two already - the year is flying by!

In this edition of Novopay news we provide you with an update on 1 April tax changes to termination pays. These will be taxed as "extra pay".

We have included a tip for My HR, showing how to make it work for you, and a housekeeping tip for allowance payment instructions in the pay period.

If you need any assistance, remember we are here to help.

http://www.novopay.govt.nz/images/Mathew-signature.jpg

Regards,

Mathew Gordon
Manager Service Desk and Support Education Payroll Limited

IRD's 1 April Tax Changes to Termination pays


What you need to know

As part of the IRD initiated 1st April tax changes, holiday pay / annual leave on termination and accrued annual leave paid in advance, will be taxed as "extra pay" and therefore at lump sum rate.

The change

This legislation change applies to every employee in New Zealand.

The extra pay tax rules are intended to ensure that any payments made in addition to an employee's usual salary or wages for a pay period are taxed at the appropriate tax rate so that the employee is not over or under taxed.

What does it mean for me?

If your school employee receives a leave in advance payment or termination at the end of the school year, the net payment is likely to change. This payment will be different for each individual.

Given the nature of this change and its impact, we recommend that you visit IRD's website for more information and review the FAQ's, please see:

http://www.ird.govt.nz/technical-tax/op-positions/op-position-calculating-paye-holiday.html

Tip: Be Prepared

The change of season is the perfect opportunity to review employee records and emergency contact details. You can update employee addresses, email addresses and emergency contact details in NOL. Adding them to NOL enables you to access these details from any PC in the event of an emergency.

Update addresses and emergency contacts by visiting the 'My HR' page and choosing 'Personal Details' then 'Personal Contacts and Emergency Contacts'. To view and update staff email addresses go to 'My Reporting' and click on 'School Reports' and 'Payslip Re-Mail'.

If you need to make other employee record changes, such as a change of surname in the case of marriage, please submit a Novo2 form to the Pay Centre.

Housekeeping

Remember to submit allowance payment instructions in the pay period the employee completed the work. It's another way of simplifying your payroll processing, and keeps your records up to date.