With the 31st of  March fast approaching, we thought it was a good time to remind you of some of the changes that may affect you or your business in the coming tax year.

KiwiSaver Contributions Increase

The minimum KiwiSaver contribution rate will change from 1 April 2013, rising from 2% to 3%.  This means that if you are currently contributing the minimum 2%, your rate will automatically change to 3%.  However, you'll still be able to select a higher employee contribution rate of 4% or 8%.  The minimum employer contribution rate also increases to 3%.

Childcare and housekeeper tax credit removed

Whilst in prior years you have been able to claim a tax credit for payments made for childcare and/or a housekeeper, from 1 April 2012 this is no longer available.

Student loan changes

From 1 April 2013 the rate for standard student loan repayments increases from 10% to 12%. 

In addition the voluntary repayment bonus will be removed from 1 April 2013.  Extra repayments made from 1 April 2013 for obligations for the 2014 tax year onwards will no longer qualify for the bonus (but will still help you pay off your loan faster).

Tax credit for children removed

The child tax credit meant that it was previously possible to pay school children who work in your business up to $45 per week (or $2,340 per year) without having to deduct PAYE.  The entitlement to claim the tax credit for children was withdrawn in May 2012.

Therefore, all payments to school children now need to have PAYE deducted as with payments to other employees.

Tax credit for income $9,880 removed (ML and ML SL tax codes)

The tax credit for income under $9,880 has been removed for the 2013 year onwards. 

Employees who were earning less than $9,880 could claim this tax credit during the year by using the "ML" or "ML SL" tax codes.  However, the Tax code declaration (IR330) form has now been updated to remove these tax codes. If you have been using this tax code during the year, and now can't claim the tax credit in your tax return, there are some transitional rules that apply.

For any businesses using computerised payroll packages, please ensure that you have upgraded your software prior to your first pay period after 1 April 2013 to ensure the appropriate changes are made.

If you have any questions about the impact of any of the above changes on your situation then please contact one of the team who will be happy to help you.



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