The impact of Covid-19 on industry tax

For a small tax, which only collects about $ 600 million a year, the tax burden is more on its burden in terms of the amount of anger created against workers.

For local employees, constant changes regarding unrelated relationships, deadlines and rules about when you have to leave employees because you have indicated good one, very difficult to navigate.

While we are heading towards the kiwi fruit harvest.

Workers are really doing everything they can to take good care of their employees so that they can continue to work. And while tax may not be important in these considerations, it is important to consider the tax consequences of the actions that employees are considering (or have already implemented).

Incentives for pharmaceuticals

As the “two shots for the summer” were a good incentive to keep Kiwi ahead of the Christmas holidays, companies in New Zealand have given incentives to workers to get their medicine. medicine. This is usually in the form of single payments or gift vouchers.

It’s a win-win, because employees get the motivation and can return to work in a safe place with their colleagues while businesses can continue to engage with customers and the wider community with low self -esteem and high self -confidence.

A cash bonus paid to an employee for receiving medical treatment in their work is also taxable income.

Employers are required to deduct PAYE from those incentive payments paid to employees, and payments can be fixed such as a KiwiSaver reduction or a student loan.

If the employer wants the employee to earn, for example $ 100 on hand, that amount must be collected for PAYE and other deductions to calculate the maximum income to report to the Inland Revenue. For employees at 33 per cent, the total cost increase is 49.25 per cent and even more since KiwiSaver etc. was taken care of.

If a non-cash benefit such as a supermarket voucher or Prezzy card is offered in lieu of cash, this will be subject to fringe benefit tax (FBT), unless the manufacturer is de-issuing. minimis about unclassified fringe benefits.

This releases unspecified benefits if:

  • The value of unrealized benefits to each employee does not exceed $ 300 per quarter for a quarterly FBT fund or $ 1,200 per year for an annual FBT fund;
  • The tax value of all uncountable benefits provided to all employees shall not exceed $ 22,500 in the past four quarters (or per annum for annual files).

If these thresholds are exceeded, the non -enumerated benefits, including the credit cards issued for security, apply to FBT.

Employers in New Zealand are offering incentives to employees to get their cans. This is usually in the form of single payments or gift vouchers.

Some workers would be required to retire in order to continue working, as the incentives provided by the workers were not related to re -paying the cost of obtaining corn. Exemptions from FBT and PAYE do not apply where the manufacturer covers the cost of jab flu for employees.

WFH studies

Under the red line of the Covid-19 Protection Framework, many employees work from home full-time or work day or week around the office to reduce the risk of the number of employees receiving Covid-19. or be considered close relationships.

The Inland Revenue issued a guide (in Resolution EE003) when scholarships are paid to employees to compensate them for extra costs incurred while working from home it can be kept tax -free.

This includes regular refunds and special fees for telephone costs and to cover the cost of the employee purchasing supplies to use at home.

If this is something you have done or are thinking about, you should read this and get advice on how to pay taxes on those fees.

Select: Don’t be penalized by the high interest tax

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The impact of Covid-19 on industry tax

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