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Are you Ready to do your Payroll?
The NZ Government have set up a wages subsidy for your wages and salaries.
This is also available for contractors, sole traders and those that are self employed.
The weekly rate is $585.80 for full staff employees or $350 for employees with less than 20 hours.
We have spent some time late last week and again this week working with our clients on the best way of processing.
There are many and varied variations and requirements made on the pay person, from employees, management to accountants and lawyers.
You are doing a great job with many many hours work to achieve this, this week will be tough for many.
What we are finding, that no two setups are the same;
- Some employers are paying just 80% of usual/normal wages.
- Some employers are topping up to 100% wages and salaries
- Some employees are taking leave
- There are redundancies
- There is salesman with commissions and retainers
There is one overriding statement which you should keep in mind;
Employers and businesses accessing the Wage Subsidy are expected to take “best efforts” to retain employees and remunerate them at least 80% of their normal income.
Where this is not possible, the Government expects that, at a minimum, employers pass on the full value (less taxes) of the subsidy to employees (i.e. either $585.80 or $350 per week for 12 weeks) unless the employee is ordinarily paid less than these amounts; and retain employees for the duration of the subsidy.
Consult with your Company Advisors
You will be receiving significant information from many sources, but recommend you read as much as possible, discuss with your accountant or lawyer their interpretation and your requirements and then we can assist you with the appropriate settings.
Clear Communication with your employees
There are still many questions, but the important thing is to ensure that you have clear communication with your employees on what they can expect, what leave they may need to use and if there is to be any terminations or redundancies.
Your important References
Business.govt.nz (link)
Here is the latest news (28/3/2020).
covid19.govt.nz (link)
For all the latest news, and the link to the available subsidy.
Canterbury Employers Chamber of Commerce
During last week the Canterbury Employers’ Chamber of Commerce ran a webinar, there was some excellent speakers and many many questions.
Here is the supporting information in clear and concise terms and explains the scheme.
MYOB IMS Payroll – possible setup for subsidy payments
MYOB IMS have supplied a possible setup for codes.
MYOB IMS Payroll Version 6.5
For the new Tax year you need to be on MYOB IMS 6.50 and have completed your year end reports before you undertake the payrun for a payroll paid 1 April 2020 or after.
Time to do your wages!
You will have questions on this and how to make it work for your company, we are happy to help;
- Setup of new payment codes
- How to process your periodic pay
- How to make it work in your general ledger and setup new codes in the payroll
- How to ensure you can report on payments made
- How to establish what the ‘normal’ or ‘usual’ pay is.
We are able to assist you to walk through the various settings and achieve what you need this week.
Tips!
Pay wages at 80%
The documentation all points out you are to pay at least 80% of the normal or usual wages.
Now, 80% of what!?!
Is this contractual hours or average daily hours rate?
After some investigation, and consultation with our accountant, you may consider using the Average Gross wages paid over the previous 12 months.
We have also just read a newsletter from a lawyer who states to use contractual hours.
Useful report details.
You and your business will think of many ways of doing this, if you would like to discuss with us, please do not hesitate to ring 03 6931121 ext 4
Subsidy Repayment
When you apply you will be paid the subsidy in a lump sum up front for the employees applied for, for the full 12 weeks, which you will then pay out weekly as wages.
This is open to interpretation, if you are able to all go back to work after the four week level 4 lockdown, AND if after that stage you don't meet the 30% sales down from previous year criteria, then the balance of the subsidy lump sum repayment is probably going to be repayable back to the government.
Ensure that you keep the subsidy payment separate, pay the wages from it weekly etc, but try not to use it elsewhere in the business, just in case you do need to repay some part of it.
Office Contacts:
Accounting & Logistics
E: help@hhaassociates.co.nz
Lending & Investment
E: support@hhaassociates.co.nz
Onlinehha
E: help@hhaassociates.co.nz
Or please call 03 693 1121 for telephone support. |
Disclaimer: This publication has been carefully prepared, but it has been written in general terms only. The publication should not be relied upon to provide specific information without obtaining appropriate professional advice after detailed examination of your particular situation. |
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