End of tax year procedures 2024 - NZ

The ACC levy deduction is included in the PAYE amount displayed on the Employee's Current Pay screen (MPPP3130).

Repayment thresholds

The minimum wage has increased, effective from 1 April 2024. For more details, see Ministry of Business, Employment & Innovation – Minimum wage rising to $23.15 per hour from 1 April 2024.

From 1 February 2024, the median wage rate has been increased for the Accredited Employer Visa (AEWV), the Skilled Migrant Category, and some occupations covered by Sector Agreements and the Green List.

Median wage rates apply to migrant workers who hold Accredited Employer Visa (AEWV), occupations covered by sector agreements, and residence visa categories.

• New AEWVs issued on/after 27 Feb 2023 must be paid an hourly rate of at least $29.66, this rate remains until 31 Jan 2024. From 1 Feb this increases to $31.61.

• Existing AEWVs issued before 27 Feb 2023 must be paid hourly rate of least $27.76 this rate remains until 31 Jan 2024. From 1 Feb this increases to $31.61.

For more details, see New Zealand Immigration – New median wage to apply from February 2024

This section lists reports that can help your organisation to reconcile your financial records for the previous tax year and help set up employee records for the new tax year.

• Pay Activity Details Data report

• Pay Summary report

• Superannuation report

• ESCT report

Make sure you run your end-of-year reports before you close any pays for the new tax year, and that you include all employees who worked for your organisation (not just current employees).

 Closing the first pay period of the new tax year resets all of the year-to-date accumulators on employee's payslips.

Business ACC default rates

If you use MYOB Advanced Payroll for managing general ledgers, it's good to check if your business's default Business ACC Rates and Business Classification Codes (BIC) or Classification Units (CU) are up to date.

Business ACC Levy Rates aren't the same as ACC Levy rates, which are used as part of tax calculations for an employee. For more details, see Calculating your levies.

You can check these on the ACC Rates screen.

You can then change the employee's ACC code on the Employee Defaults tab of the Pay Details screen.

Pay item and standard pay settings

If your company's financial year is same as its tax year, check your employee pay item and standard pay settings are up to date.

On the Pay Group tab of the Pay Details screen or the Employee's Current Pay screen, you can check if your employees' salaries and rates are above minimum wage limits.

The Pay Activity Details Data report is helpful when verifying that your employees' rates comply with the minimum wage rate for the new tax year. It can also help identify which employees might need their salary/wage rates revised.

At the beginning of each tax year, you need to work out the ESCT rates for your staff. This varies for each employee, as it’s based on their salary or wage for the previous year plus their employer contribution.

The new ESCT report can help you calculate your employee's ESCT rates for the next tax year.

ESCT rates aren't automatically calculated in MYOB Advanced Payroll. So, before you open the first pay of the new tax year, make sure you calculate ESCT rate and update them on the Taxation tab of the Pay Details screen.

Once you calculate an employee's ESCT rate, it remains the same for the whole tax year, even if there are changes to their salary or wages during the tax year.

If an employee worked for you for the entire previous tax year

When an employee's start date is before the previous tax year's start date, then their ESCT rate depends on ESCT threshold value, which you can calculate using the following formula:

ESCT Threshold = Total Gross Income in Previous Tax Year + Total Gross Employer’s Superannuation Contributions in Previous Tax Year.

If an employee started in the middle of the previous tax year

If an employee's start date is after the previous tax year's start date, but before the start of the current tax year, their ESCT rate value is based on their expected income for the current tax year:

ESCT Threshold = (Estimated Gross Income per pay for current Tax Year + Estimated Gross Employer’s Superannuation Contributions per pay for current Tax Year) / Number of days in the pay frequency in current Tax Year * Number days in current Tax Year (i.e. 365).

If an employee started in the middle of the current tax year

For employees starting in the middle of the current tax year (not the previous tax year), ESCT Rates for those employees for the current tax year are expected to be set as part of their onboarding process, as per the IR page on deducting ESCT from each employer contribution.

Every year, you need to add the coming year's public holidays to your employee work calendars. There are no mondayised holidays in the 2024-25 tax year.

For details of the 2024 and 2025 public holidays, see Employment New Zealand – Public holidays and anniversary dates.

When you update a work calendar, it impacts all employees that use the same calendar. If you only want to make changes for certain employees, you can create a new calendar for them with desired settings. For more details, see the annual leave white paper. 

Adding a public holiday to a work calendar

1. Go to the Work Calendar form (CS209000).

2. Select the calendar you want to update.

3. Click the Exceptions tab.

4. Click the Add Row button.
   

   

5. In the new row, enter the date for the holiday.

6. Complete the Description field, Start Time and End Time fields.

7. On the form toolbar, click the Save icon.

You can follow these steps on either the Master Financial Calendar screen or the Company Financial Calendar screen, depending on how your site is set up.

You need to have a financial calendar with open periods for the 2024–25 tax year. In the Financial Year field, make sure you have a 2025 calendar.

If you don’t have a 2025 calendar, generate one

1. Click Generate Calendar on the form toolbar.

2. In the Generate GL Calendar window:

   1. Set the From Year to 2024.

   2. Set the To Year to 2025.

3. Click OK.

Open the periods for the 2025 calendar

1. In the Financial Year field, select the 2025 calendar.

2. On the form toolbar, click the three dots icon … and choose Open Periods. The Manage Financial Periods form (GL503000) opens.

3. If the Status column shows the periods are Inactive, you need to open them. Select Close from the Action dropdown.

4. Set the To Year field to 2025.

5. On the form toolbar, click Process All.

The IR issues tailored tax codes (STCs) by tax year, so they always expire on 1 April the following year.

Unless IR issue you with a new tailored tax code or deduction rate (IR23) certificate, or if they advise you to continue using the old rate, you should inform your employees that you are obligated to set their tax code to ND.

Otherwise, their tax is calculated at the highest rate and prevents student loan repayments. This could also incur late payment penalties for the employee.

It's recommended that you identify and advise affected employees of the consequences of not receiving their new year's tax rate, ensuring that you and your employees have enough time to respond to any required tax changes before the first pay in the new tax year.

Make sure the standard student loan, SLCIR and SLBOR rates are set correctly in the system for the employee (if applicable) in the Taxation tab of the Pay Details form. To change from the standard rates, see Overriding legislated student loan rates.