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How do I comply with an IRD request to deduct tax at a specified percentage?
The IRD may send you an IR 23 Special Tax Code Certificate asking you to deduct tax at a specified percentage rate.
The rate specified by the IRD may be inclusive of ACC Earner Premium, or plus ACC Earner Premium.
You will know the rate is plus ACC Earner Premium because
If the rate is plus ACC Earner Premium, select STC ACC Plus as shown above, then enter the percentage value.
Sometimes the rate specified by the IRD is inclusive of ACC Earner Premium.
You know this because
If the rate is 29.39%, what the IRD really mean is you deduct tax of 28%, plus earner premium of $1.39 per hundred dollars.
Do this by selecting a percentage tax code for your employee, enter 28 as the percentage, and ensure you select the code to be inclusive of ACC Earner Premium.
Not only does this produce the correct tax deduction, but when the earner premium changes in the future it is automatically adjusted by Ace Payroll without any input from yourself.
The IRD has sent us an IR23 Special Tax Code Certificate asking to deduct student loan at 12 cents in the dollar. How do we do this?
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We have been asked by the IRD to deduct withholding tax for a contractor at zero percent with no earner premium. How do we do this?
If the IRD has asked you to deduct tax at this rate set the employee tax code to 'NIL Zero Tax'. Scroll down - it is the last tax code shown.
No tax will be deducted from the employee wages, and the gross payment will still be returned on your monthly schedule showing the tax code as 'STC' - special tax code.