After the craziness that has been the last 12 months it is almost that time again. End of Financial Year is nearly here and as usual this is the time of year when there are a number of changes that will take effect on 1 April 2021. The following is an overview to help you keep up to date:
Minimum Wage Increase
Effective 1 April the minimum wage rate will increase from $18.90 to $20.00 per hour.
The starting out and training minimum wage will increase from $15.12 to $16.00 per hour.
Depending on which payroll software you are using this will either need to be updated manually or your software will prompt you. Either way you need to ensure that from 1 April on you’re paying your staff at least minimum wage.
New tax threshold and tax codes
From 1 April 2021 there will be a new tax rate apply for all those earning over $180,000. This takes the top tax rate for individuals up to 39% for the 2021 / 2022 tax year for all income over $180,000
The table below is the new income tax rates for individuals from 1 April 2021:
Student Loan repayment threshold – this is to increase from $385 to $390 per week.
Employer Superannuation Contribution Tax (ESCT) – a new ESCT rate of 39% will be introduced for all earnings plus super which total more than $216,000.
Changes to Sick Leave allowance
We are often being asked about the proposed change of sick leave from 5 to 10 days. This Holidays (Increasing Sick Leave) Amendment Bill is still only a proposed change and the bill has not yet been passed. It is, however, expected to be passed later in the year.
End of Financial Year Process
With EOFY only a few days away now is a good time to write off any bad debts your business may have. If there is anything that it is unlikely, you’ll be paid to write this off before 31 March. Don’t miss the top four EOFY processes you need to complete to square away 2020.
Also, a reminder that tax payments are due 7 April and 7 May.
Now is the time to prepare your home office claim also – if you need help with this feel free to reach out to the team by calling 04 232 9199
As always, we are really aware that there is a lot going on at this time of year for everyone. If there is anything we can help with, please feel free to call Sue on 021 812 112 or email Sue@3rdArmAdmin.co.nz or leave your details below and we will be in touch. We are here to help!!