The ACC Earner Levy is a component of the PAYE. This means the decrease will decrease the employees PAYE and increase their net pay.

This will automatically come into effect when you enter a pay period end date of 1 April 2012 or later.

 

SB SL (Secondary Bottom with Student Loan repayments)

 SB means Secondary Bottom and is where an employee is in secondary employment and earns less than $14,000 per year.

 so SB SL is used for an SB employee paying off a student loan.

 

ML SL (Main Low with Student Loan repayments)

 ML means Main Low and is used by employees in the following situation:

  - They are a New Zealand tax resident, and
  - work 20 hours or more per week in all jobs with an income less than $9,880, and
  - are not entitled to Working for Families Tax Credits, and
  - are not a child or attending school, and
  - earned income that was not student allowance or income tested benefit

 so ML SL is used for an ML employee paying off a student loan.

 

IRD will advise you if additional deductions are to be made using SLCIR.

For SLBOR deductions, the employee will advise their employer if they wish to make additional payments to reduce their loan balance.

 

You can enter the SLCIR and/or SLBOR amounts under "Enter Current Pay", where you will see three new white boxes under the Tax Code:

 

Click on the relevant box to enter the requried figures.

 

The S.D.R. box is for "Special Deduction Rate", which is another Student Loan rate you will use only if advised by the IRD.

 

There are four different ESCT rates - the one to use depends on what the employee is expected to earn for the current financial year. Payroll Pro will estimate this for you, based on the IRDs required formula. The IRDs required formula is:

- Use the previous years income (Gross Pay plus Employers KiwiSaver Contribution) to estimate this years income.

- If the employee did not work the whole of the previous year, work out an annualised figure from last years earnings and use this.

- If the employee did not work at all in the previous year, estimate what they will earn this year (from current salary or wages).

The earnings are called the ESCT Rate Threshold.

 

When the ESCT Rate Theshold is $16,800 or lower, the ESCT rate to use is 10.5%

Between $16,801 and $57,600 the ESCT rate to use is 17.5%

Between $57,601 and $84,000 the ESCT rate to use is 30%

Above $84,000 the ESCT rate to use is 33%

 

Once the ESCT rate for an employee has been entered, Payroll Pro will handle the calculations for you, and will handle all changes to the Employers Monthly Schedule (IR348) and the IR345 for you.

 

 

Payroll Pro will prompt you to confirm the ESCT rate during the first pay after 1st April.

This will happen when you set the employee to be paid (by clicking "To be paid this payun" under "Enter Current Pay").

This means you do not have to remember to do this.

However, you can also enter this under "Add & Edit Employees".

 

If you have made your own calculation of what the rate should be you can easily select a different ESCT rate than the one suggested by Payroll Pro.

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NOTE - ESCT is calculated on the whole dollar amount only. This means the ESCT amount calculated may sometimes look a little lower than the ESCT percentage.

Here is an example direct from the IRD - found on page 7 of "Weekly and fortnightly PAYE deduction tables 2013 IR340":

ESCT is calculated on the whole dollar and is deducted from the gross employer contribution.

Example:
Employee has gross earnings of $392.40 and an ESCT rate of 17.5%
Gross employer contribution (2%) $7.84
ESCT is applied to the whole dollar (ie, $7.00 in this example)
$7.00 x 17.5% = $1.22 ESCT
Deduct the ESCT from the gross employer contribution
$7.84 - $1.22 = $6.62 net employer contribution