Minimum Wage Increase
The first change coming in at April 1st is an increase in the minimum wage from $14.75 to $15.25. The starting-out and training hourly minimum wages rates will also increase from $11.80 to $12.20 per hour. Please note that it’s up to you to update your employee pay rates for anyone on minimum wage. FlexiTime can’t automate this process as there is so much variation in the ways our clients implement the minimum wage. If you have to change the rate in the middle of a pay period, this support centre article may be of use.
The tax system has been nice and stable for a few years, so the only change you'll generally notice each year is a small shift in ACC rates. This year the ACC rate is changing from 1.45% to 1.39% so your employees will have 0.06% less PAYE deducted. This change happens automatically in FlexiTime, but if you've got direct debits set up for salaried employees please note that you will need to change the payment amounts. This change will take effect with any pays that have a pay period end date on or after April 1.
FlexiTime are also implementing a change to the tax calculation on final pays. Any holiday pay or annual leave paid out in a final pay will be taxed as an extra pay from April. The change follows a ruling from the IRD that you can read about here. Previously, if (for example) you were being paid out 6 weeks leave in a final pay, it would be taxed as if it was earned across a 6 week pay period. The new approach means the amount will be taxed at the employee's top marginal rate which will mean more tax being deducted on final pays.