ESCT and the ir348 and ir345
Employer Monthly Schedule ir348 (EMS) and Employer Deductions ir345 (ED)
Ignore the following information if you don't have any employees in KiwiSaver
ESCT (Employers Superannuation Contribution Tax) is now deducted from the Employers Contribution to KiwiSaver.
The ESCT will NOT show on the IR348 (EMS) - it is shown on the IR345.
The KiwiSaver Employer amount on the IR348 (EMS) is the net amount AFTER ESCT. This is the requirement of the IRD.
Here is an example:
IR348 (Employer Monthly Schedule, or EMS)
____________________________________________________________________________________________________
EMPLOYEE Gross Not Liab Lump Child Stu KiwiSaver KiwiSaver
IRD-NUMBER TAX-CODE Earnings For E/L PAYE/WT Sum Support Loan Employee Employer
____________________________________________________________________________________________________
BLUE, B
012-345-674 M 1000.00 - 182.76 N - - 20.00 14.00
In the above example, the employee is on 2% KiwiSaver, and their ESCT rate is 30%, so the Employer Contribution is
2% * 1000 = $20, less ESCT of $6, giving $14
(Note that the percentages used here are for this example only - your actual percentages could be different).
The IR348 (EMS) does not include the ESCT at all - so of course there is more to pay to the IRD than the amounts showing on the IR348 (EMS).
The total of the ESCT is shown in the IR345 Employer Deductions Report (ED):
IR345 (Employer Deductions, or ED)
_____________________________________________
IRD Number [1] 012-345-674
Period Ended [2] 30/04/2012
PAYE & Withholding Tax [3] $ 182.76
Child Support deductions [4] $ 0.00
Student Loan deductions [5] $ 0.00
KiwiSaver Dedns (Employee) [6] $ 20.00
KiwiSaver EmployER contr. [7] $ 14.00
ESCT deductions [8] $ 6.00
_____________________________________________
TOTAL amount to pay [9] $ 222.76
The IR345 (ED) report is the one just below the IR348 (EMS) on the Payroll Pro Reports Module.
Note that when you create your IR345 in Payroll Pro, you will select "Small Employer" if you are a small employer (filing once per month), or you will choose "Large Employer" if you are a large employer (filing IR345 twice per month).
The IR345 (ED) and IR348 (EMS) in Payroll Pro are created as per the IRD's instructions.
If you are filing Electronically - SMALL employer filing ONCE per month
This is where you create the irFile from Payroll Pro which is uploaded to the IRD's website. There are really no changes here, except that you should know the amount of ESCT, which you can get from the printed IR345 (ED) report.
From Payroll Pro, you will create the IR348 (EMS) file in the usual way, and then print the IR345 (ED) form, which contains the amount to pay, including any ESCT. If you are a small employer, ensure you have "Small Employer" selected when creating the IR345 in Payroll Pro.
You will upload the IR348 (EMS) to the IRD's website in the usual way.
The next step is the online IR345 (Employer Deductions), and you may be doing this in one of a few ways:
Using the "Create IR345/ED" button
After sending the IR348 (by clicking the "Send" button on the IRDs website), a button will appear - "Create IR345/ED" or very similar wording.
If you use this button, then it automatically fills in the IR345 payment information for you based on the IR348 you just uploaded and sent. In this part, you will see a box for the ESCT. The ESCT box will probably be blank since the IR348 does not contain any ESCT information - so please check this. If it is blank, you will need to fill in the ESCT amount from the IR345 (ED) report printed from Payroll Pro. You may then also need to click the "recalculate total" button. The total to pay will then include the ESCT amount.
As at 15 May 2012, we understand that if you leave the ESCT box blank in the IRDs website, a warning may not appear, but that IRD will be adding a reminder to this in the near future. This means at present the IRDs website may just let you continue without entering the ESCT. If you have already filed a schedule and forgotten to pay the ESCT portion, you should contact IRD and arrange with them how to pay this.
or
Uploading the Employer Deductions File (IR345 ED)
As well as being able to create the IR348 file for uploading, Payroll Pro can also create the IR345 file to be uploaded, so you might be creating and uploading this file also. The IR345 file created by Payroll Pro contains the ESCT amount, so the IRDs system will then fill the ESCT amount in for you from the total in this file.
If this is the process you have been using in the past, then you shouldnt need to do anything different.
or
Manually Entering the IR345 (ED) information
If you have been manually entering the IR345 totals into an online form for the IRDs system, then you will be copying these totals from the printed IR345 report from Payroll Pro. This will show the ESCT amount, so you will simply be copying the ESCT amount into the on screen box.
Click here for a tutorial about the IR348 and IR345 with screen shots
If you are filing Electronically - LARGE employer filing TWICE per month
There are really no changes here. You are most likely uploading the IR348 (EMS) file once per month, and uploading the IR345 (ED) file created from Payroll Pro twice per month.
If you are entering the IR345 (ED) information manually into the IRD's system, you will see the ESCT amount on the printed IR345 (ED) report which you can print from Payroll Pro.
If you are filing Manually
If you are printing the IR348 (EMS) from Payroll Pro and signing this and sending it to the IRD, then you are probably also manually filling out the IR345 form. You will see a box for ESCT on the IR345 which you can copy from the printed IR345 (ED) report from Payroll Pro.