Farm Accounting NZ Vol 104 & 105 - Busing Russell
The holidays and summer months see an increased number of casual staff working on the farm. These are often university or secondary students on their summer holidays. If a taxpayer pays wages, PAYE must be deducted and returned to the IRD. The Casual Agricultural Employer (CAE) tax rate is currently 17.5% (plus ACC levy). Casual staff should be encouraged to look at filing a personal tax summary (PTS), especially if they earn less than $14,000 pa, as they may be due a tax refund.
School Students
All employees, including those of school age, are required to complete an IR330 and have PAYE deducted from their wages.
KiwiSaver
Employees on temporary contracts of less than 28 days are not required to be enrolled in KiwiSaver. If they are already members and wish to have KiwiSaver deductions made, they must provide their employer with a KiwiSaver deduction form (KS2).
Holiday Pay
Where employees receive holiday pay rather than annual leave, the holiday pay must be calculated at a rate of at least 8%.
Employment Contracts
All employees (including casuals) are required by the Employment Relations Act to have a written employment contract. The contract should state hours, place of work and any other agreed terms and conditions.
Penalties
Failure by a taxpayer to follow the correct processes when employing staff leaves them open to action from the Inland Revenue and the Ministry of Business, Innovation and Employment. Both groups have recently been looking into the dairy industry and have found widespread non compliance. There have been a number of high-profile prosecutions with significant fines and penalties being handed down.
School Students
All employees, including those of school age, are required to complete an IR330 and have PAYE deducted from their wages.
KiwiSaver
Employees on temporary contracts of less than 28 days are not required to be enrolled in KiwiSaver. If they are already members and wish to have KiwiSaver deductions made, they must provide their employer with a KiwiSaver deduction form (KS2).
Holiday Pay
Where employees receive holiday pay rather than annual leave, the holiday pay must be calculated at a rate of at least 8%.
Employment Contracts
All employees (including casuals) are required by the Employment Relations Act to have a written employment contract. The contract should state hours, place of work and any other agreed terms and conditions.
Penalties
Failure by a taxpayer to follow the correct processes when employing staff leaves them open to action from the Inland Revenue and the Ministry of Business, Innovation and Employment. Both groups have recently been looking into the dairy industry and have found widespread non compliance. There have been a number of high-profile prosecutions with significant fines and penalties being handed down.
