Ace Payroll: IR335 Inland Revenue Employer's Guide

Introduction

If you have anyone working for you, it is your responsibility to deduct tax and other amounts from payments you make to them, as well as giving information to the IRD.
We explain what you are required to do, and what happens if you do not comply.
If you have not yet registered as an employer, read our First-time employer's guide (IR 333). It tells you what you need to know before you register as an employer.

If you need help with any of your employer responsibilities, or you have questions about anything in this guide, please call the IRD on 0800 377 772.
If you want to know how Ace Payroll handles any of the detail contained in this guide, call Ace Payroll on 0800 223 729.

Work Permits

If you're thinking of hiring someone from overseas, they need a work permit.
Only citizens and permanent residents of New Zealand and Australia may work in New Zealand without a work permit - everyone else needs one.
You can be fined for knowingly employing overseas workers without valid work permits.
For more information on work permit requirements please call the New Zealand Immigration Service on 0508 558 855 or go to www.immigration.govt.nz

Part 1 - Your responsibilities as an employer
This part deals with employers day-to-day responsibilities. It explains who is an employee, and about the amounts you may have to deduct from your employees wages.

Part 2 - Records
This part tells you what records you need to keep, how often to pay deductions to Inland Revenue, and what forms you need to complete when you pay the deductions. It also tells you what to do if you stop being an employer.

Part 3 - Other payments
Employers may make payments other than normal wages to their workers. This part explains the tax treatment of these other types of payments.

Part 4 - Penalties
This part tells you about the penalties and charges applicable if you fail to meet your tax obligations.

Part 5 - Special types of workers
An explanation of how to deduct tax from the payments you make to special types of workers.

Part 1 - Your responsibilities as an employer

Who is an employee?	Child support deductions
Amounts you will need to deduct	Deducting employees' arrears
Deducting PAYE	Special tax code certificate IR 23
Tax code declaration IR 330	Withholding payments
No-declaration rate	Certificate of exemption IR 331
ACC earner premium	Superannuation fund contributions
Student loan deductions	ACC residual claims levy

Part 2 - Records

Records you need to keep	The Employer monthly schedule - IR 348
Computer payroll systems	Child support codes
Paying deductions to Inland Revenue	Electronic filing ir-File
Are you a small employer?	How to pay your deductions
Are you a large employer?	Employee stops working for you
Large employers with other pay periods	If you permanently stop paying wages
Employer deductions IR 345 and IR 346 forms	If you have stopped business
Completing the IR 345	Running totals
Completing the IR 346

Part 3 - Other Payments

Allowances	Loss of earnings compensation
Lump sums	Honoraria
Bonuses - regular	Life insurance and personal accident premiums
Holiday pay	Prize money

Part 4 - Penalties

Interest	Evasion and similar offences
Late filing penalty	Additional student loans penalties
Non-electronic filing penalty	Additional child support penalties
Shortfall penalties	Employee start and finish information penalties
Failing to make deductions	Audit procedures
Failing to pay deductions to Inland Revenue	If you disagree
Aiding and abetting	Privacy Act - What you need to know

Part 5 - Special types of workers

Casual agricultural workers	Partners in a partnership
Commission agents	Piece workers and outworkers
Directors	Shareholder-employees in close companies
Drovers and musterers	Shearers shedhands and shearing contractors
Election day workers	Spouse - wages paid to your wife or husband
Fishermen	Students
IR 56 taxpayers	Subsidised workers
Jockeys and trotting drivers	Workers receiving the community wage
Musicians dance bands and orchestras	Labour-only contractors
Non-residents

Editors Note: This document originally published in PDF format by the IRD. Converted to a browsable format by Ace Payroll.

IR335 Inland Revenue Employer's Guide - Contents