With several payroll changes coming 1st April 2024, it’s important to understand the changes and how they will affect your business.
Minimum Wage Increase
| Adult |
Increasing from $22.70 to $23.15 |
| Starting Out/Training |
Increasing from $18.16 to $18.52 (80% of adult minimum wage) |
The new rates are effective from Monday 1st April 2024 so it’s a perfect opportunity to check all employees payrates.
Student Loan Threshold Increase
The threshold is increasing from $22,828 to $24,128 per year. This is equivalent to
$464.00 per week
$928.00 per fortnight
$2,010.66 per month
Student Loan repayments are deducted at 12% of every dollar over the repayment threshold amount.
The rate change will be effective for the first pay run after 1st April 2024.
ACC Levy increase for 2024/2025 year
The ACC levy will be increasing from 1.53% to 1.60% for earnings less than $142,283. For every $100 gross this will be $1.60 and effective from the first pay run after 1st April 2024. ACC levies are part of the PAYE deducted from wages. This means a reduction in net payments to employees so if Automatic Payments are set for employees, these will need updated.
The thresholds are:
| Income |
Tax rate + ACC Levy |
| Up to $14,000 |
10.5% plus ACC 1.60% |
| $14,001 to $48,000 |
17.5% plus ACC 1.60% |
| $48,001 to $70,000 |
30% plus ACC 1.60% |
| $70,001 to $142,283 |
33% plus ACC 1.60% |
| Earnings greater than $142,283 do not have the ACC levy applied. |
| $142,283 to $180,000 |
33% no ACC |
| Over $180,001 |
39% no ACC |
Employer KiwiSaver Contribution - ESCT Tax Rates
The Employers KiwiSaver Contribution is taxed, and this percent is dependent on the employee’s expected annual income.
To do this, look back at the employee’s gross earnings for the past 52 weeks (or relevant period and divide by the number of paid weeks, then multiply by 52 to get an estimated annual income).
Check their ESCT rate and update if necessary. These are:
| Expected Annual Income |
Tax Rate |
| $0 to $16,800 |
10.5% |
| $16,801 to $57,600 |
17.5% |
| $57,601 to $84,000 |
30% |
| $84,001 - $216,00 |
33% |
| $216,001 upwards |
39% |
Processing wages at the end of March 2024/beginning of April 2024.
Pay period end dates are generally different from an employees’ actual pay day.
The pay day date is the one that is used for pay-day filing to Inland Revenue.
ACC/PAYE changes are applied from the first pay from 1 April, not the pay period. If the pay period goes over 1 April, but the employee is paid in March, the old rates apply. If paid after 1 April, then the new rates apply.
Payroll Software should be updated, but if you are using the manual PAYE calculators you will need to use the 2025 year after 1st April. These are available via the IRD site – PAYE Calculator.
Reminders: End of Year tasks
- Check all employee’s payrates and update accordingly for the new minimum wage.
- Amend any Automatic Payments set up for wages as the ACC and student loan deductions in PAYE have changed.
- Check Employee’s ESCT rates if they are KiwiSaver members. Check the annual income thresholds and employee’s gross earnings for the 31-3-2024 year or their expected annual income for 31-3-2025 and amend their ESCT rate if their annual income has changed.
- Review employee leave profiles. This should be done on their annual anniversary to ensure they are receiving the correct leave accruals. (4 weeks annual leave (minimum) and 10 days sick leave whether they work 1 or 7 days per week). Sick leave anniversaries are generally 6 months after an employee’s start date and then annually there-after.
- Annual Earnings Certificates – this is optional to send to employees, but you are not legally obligated to.
Speak to an expert
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