From 1 April 2021 there are a number of payroll changes coming into effect.
Minimum wage increase – For any time worked from 1 April 2021 onward you must pay the new minimum wage of:
- Adult minimum wage – $20 per hour (increasing from $18.90 per hour).
- Starting-out and training minimum wage – $16 per hour (increasing from $15.12 per hour).
Please ensure you update this within your payroll software.
Student Loan Repayment Threshold – For payments made on or after 1 April 2021 the threshold has increasing from $385 to $390 per week.
Top Tax Rate – There is a new top tax rate of 39% for income over $180,000. The existing 33% tax rate now applies to income between $70,001 and $180,000
Employer Superannuation Contribution Tax (ESCT) – This has a new rate of 39% which has been added. This applies where earnings plus superannuation is over $216,000. The existing 33% ESCT rate now applies where earnings plus superannuation is between $84,001 and $216,000.
Secondary Income Tax Codes – To account for the increased tax rate, new secondary income tax codes have also been added. The rate for SA and SA SL is 39% for estimated annual income greater than $180,000. The Accident Compensation Corporation (ACC) Earner’s Levy does not apply to these new tax codes.
ST and ST SL secondary income tax codes have also been changed. The rate of 33% stays the same, but these codes now apply where the estimated annual income is between $70,001 and $180,000. Previously this was for all income over $70,000. The ACC Earner’s Levy continues to apply to these tax codes.
Your payroll software should take care of these updates automatically. However if you would like any assistance to check this, please get in touch.