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Wage Subsidy Extension

Wage Subsidy Extension

The government has announced an extension of a further 8 weeks to the 12 week COVID-19 wage subsidy already in place.

Note - Applications can't be made until 10th of June. It is available if you are down or expect to be down 50% in revenue for the 30 days (or nearest period) prior to 10/6/20, compared with last year.We would expect the period of May this year would be a suitable substitute if you were not a cash-based business. First step will be to look at your sales records for May 2019, or the period May 11 to June 9 so you have a benchmark.The announcement was made recently (14th May) and we expect there will be more details to come from the government, so we will send out further information as the details become clearer.

Information on the Work and Income website's "COVID-19 Wage Subsidy Extension" page on 14 May 2020 states:
A Wage Subsidy Extension payment will be available to support employers, including sole traders, who are still signifi…

ACC Update

ACC Invoicing delayed until October 2020 Invoices for the 2020/21 financial year would usually have been sent from 1 July but will now be issued in October. Other invoices issued throughout the year will also be on hold for three months. Payment options will be available once we send invoices. "We hope this will provide New Zealand businesses with some relief during the next few months. We want them to know that ACC will provide all the support and assistance we can during this challenging time," says Phil. We'll continue to track the impact that COVID-19 has on businesses. We'll make sure the most up to date information about our response and how we can assist, is on our website.

Paying the Minimum Wage during the subsidy period

Paying the Minimum Wage during the subsidy period 
Employment NZ’s website states that during the subsidy period, if an employee is not actually working, employers can choose to pay a minimum of 80% of an employee’s pre-COVID-19 income. So, for an employee on the minimum wage who isn’t working, employers could continue to pay them at 80% of last year’s minimum wage. The employee must be paid at the new minimum wage when they do start working again.

Minimum wage is going up

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Minimum wage is going up  Effective 1 April 2020   
The minimum wage  is  set to increase  on  1 April from $17.70 to $18.90  per hour.   Training  wages will also  increase to $15.12  to keep the rate at  80% of minimum wage.  What do you need to do?
 If you have any employees on the current minimum wage, or training wage, you will need to update their rate to the new minimum amount before 1 April.

Covid-19 and Payday Filing

The IRD have advised that it is important for employers to continue to file their payday filing information. Below is the information they have provided:

Filing Employment Information:

We know it’s challenging for you in the current environment to continue to file Employment Information each payday.

However, filing Employment Information ensures information about employees is up to date and accurate and will also help support any application for the Government’s recently announced wage subsidy (if required) given the current context of COVID-19.

This information will also assist as the end of the tax year is closing – and IR will be
identifying refunds (in particular) which can be sent to customers to assist during this
difficult time

GST and Income Tax on Government Covid-19 Subsidies

When you receive a wage subsidy payment from the Government, the coding in Xero will be as follows:

The income (amount received) is coded as sundry or other income (with NO GST)The wages payments to staff are done through the payroll as normal wages with PAYE etc and coded accordingly.Please clearly identify that the income is from the subsidy. Because when we prepare your annual financial statements we will record the wages subsidy income as "non assessable income" so this subsidy is not included in taxable income. We will prepare be the necessary reconciliation and work-paper to support this in your tax return.


Disclaimer: This information has been prepared based on the current information available and is subject to change. 

Lockdown Help - Covid-19 Q&A

Now that we are going into lock-down the EMA have responded to a couple of questions:
Q – Are we still obliged to pay at least 80% of people's income given our business has been forced to close?
A – No, but be prepared to justify this if/when you get audited.

Q – Are we within our rights to say to staff “sorry we can’t afford to pay you during this time but we will apply for the wage subsidy which we will pass onto you”, and you can elect to top this up with your leave entitlements
A – Yes, but you must communicate this to staff and get their approval to use their leave

Further to this last question, some information received from the Bookkeepers Association suggests that employers should put in writing & get each employee to sign a document outlining the following:
• Their information will be shared with Work & Income as part of the wage subsidy application (this is a requirement of the scheme)
• Agree to reducing to 80% of their normal wages for term of close down
• Agr…

Government Economic Package - Full details

The Government announced an Economic Response Package. This stimulus includes a subsidy for employers, contractors, sole traders or the self-employed ie the Wage Subsidy and Leave Payment Scheme.
·The Wage Subsidy is a one-off lump sum payment to support businesses in keeping people employed for the next 12 weeks.
·The Leave Payment Scheme provides support for employees that are required to self-isolate in accordance with Ministry of Health guidance.
The purpose of the Wage Subsidy is to support employers who have experienced a minimum 30% decline in actual or predicted revenue to keep employees on the payroll during this difficult period. The Wage Subsidy is calculated with reference to employees and spans a 12 week period. The subsidy is calculated as $585.80 per employee working more than 20 hours per week and $350.00 per employee working less than 20 hours per week. The subsidy will be paid as a lump sum covering a 12 week period.
The purpose of the Leave Payment Scheme is to provid…

How you pay tax to the IRD is changing

No more cheques – pay online instead From 1 March 2020 the IRD will stop accepting payment by cheque, including cheques dated after 1 March.

The safest and quickest ways for you to pay the IRD is online – either in myIR or through your bank.

For more information on the online payment options check out ird.govt.nz/cheques
Cash or Eftpos at Westpac You can continue to make cash or Eftpos payments at a Westpac branch. However, from 1 July 2020 they'll need to have a barcode to ensure the payment can be correctly allocated.

Barcodes are usually printed on Inland Revenue returns, statements or letters. Barcodes can also be generated on the IRD website, which can be printed, or just shown on a mobile device.

To generate a barcode go to ird.govt.nz/barcode