Payroll Bulletin 8
PERSONAL TAX RATE CHANGES - 31 JULY 2024
As part of the annual Government Budget2024, changes to personal income tax rates were confirmed to be effective from 31 July 2024.Changes for employers
If you use payroll software, your provider should give you an update with the new rates when they have it ready.
If you file manually or don't use a software provider, make sure you use the new tax tables in your calculations.If your software provider has not made the required updates by 31 July, we recommend you reach out and ask them to confirm when the changes will be made. Employees should not be disadvantaged if the changes are not made by 31 July. Any overpaid tax will be squared up after the end of the tax year.From the first payday on or after 31-Jul-2024 until 31-Mar-2025, new tax thresholds for employees on M, M SL, ME and ME SL tax codes will apply.There are no changes to Extra pay (EP) tax or Lump sum calculations, the annualized earnings will continue to be based on the 1-Apr-2024 threshold amounts to determine which tax rate to apply to the extra payment. ECST rates have not changed.Which PAYE tax tables
Use the PAYE tax tables that apply on the day the PAYE income payment is made to your employees.
PAYE tables to use according to pay
PAYE extra pays
Until 1 April 2025, for extra pay calculations use the personal income tax thresholds 1 April 2024 to 30 July 2024. Using these rates means less chance of people getting a tax bill at the end of the tax year. Fringe benefit tax
From 31 July2024 where benefits are attributed to each employee, a change applies to how FBT is calculated. A new calculation field will be added between tax on remuneration and FBT payable — 'FBT on net income'. To get the tax, this new field takes the net income figure and applies the FBT rates table to it — in the same way that the tax on remuneration field is calculated.
The change only applies to final quarter calculations — 4 January to 31 March, or any quarter that an employer ceases providing fringe benefits.
PERSONAL INCOME TAX RATES AS AT 31 JULY 2024
Current threshold will apply to any Extra payment (EP) or Lump Sum payments made. New threshold will apply for any wages or salary paid on or after 31 July 2024. 
Changes to personal income tax thresholds may affect other types of tax your employee pays
Secondary tax codes
If your employee use a secondary tax code, they should check if their yearly PAYE income payments will be in the new threshold. When the new rates apply from 31 July, they may need to change their tax code by completing an IR330 form and give this form to their secondary income employer.Tailored tax codes
If they use a tailored tax code IRD will recalculate it and send you and your employee a new certificate.
Source of information
https://www.ird.govt.nz/pages/campaigns/personal-income-tax-threshold-changes
If you have any questions or need further information, please don't hesitate to contact Olga at olga@topflight.co.nz
