|  |
Taxation of Holiday Pay
 | In this article we look at the taxation of holiday pay. We quote from the IRD Payroll News as shown on the left. In this IRD example an employee is taking three of their four weeks annual leave. |
Whenever a payment of holiday pay is made in Ace Payroll, the following dialog is shown immediately afterwards
Due to increasing marginal tax rates, tax on holiday pay reduces if apportioned over a number of weeks.
- The default is for Ace Payroll to include holiday pay in the tax calculation for the current pay period, as shown above. This is fine when just a few days are taken.
- If a single holiday payment is made for a number of weeks, the tax is significantly reduced by apportioning it over those weeks.
- If necessary change the number of weeks from either the spin control or by ticking the appropriate week on the table. We have circled these items in yellow on the above screen shot.
Part Weeks
If the holiday spans part of a week, use the next greatest full week. In other words for a holiday of 2 weeks and 1 day, use 3 weeks.
Changing Value
If after having selected a number of weeks as shown above, you then need to go back and change the value, this is done from the PAYE Deduction Analysis
dialog. It is fully documented in an associated FAQ.
Itemised Tax Calculation
- Note in the above screen how the total tax deduction reduces as it is apportioned over a greater number of weeks.
- Clicking any of the eight small calculator icons shown to the right of the tax column produces a report showing exactly how the tax is calculated.
- Clicking the small calculator icon for a 3 week apportionment produces the following report
More on public holidays
|
Public Holiday Entitlements Ace Payroll receives many calls immediately after every public holiday, asking whether a particular employee is entitled to be paid for the public holiday more.. |
Public Holiday Taken Use this method for an employee who did not work on the public holiday, but would have worked had the day not been a public holiday more.. |
Public Holiday Worked Use this method for an employee who works at any time on a public holiday more.. |
| Public Holiday Calendar A facility in Ace Payroll to check when public holidays fall in this and future years more.. | Christmas and New Year 2016/2017 Working out public holiday entitlements during the 2016/2017 Christmas and New Year holiday period more.. |
|
Waitangi Day Waitangi Day commemorates the signing of a treaty at Waitangi on 6 February 1840 more.. |
|
Queen's Birthday The Queen's Birthday is always observed in New Zealand on the first Monday in June more.. |
|
Default Provincial Anniversary Day Select the provincial anniversary day observed by the majority of your employees to make it the default more.. | Payment For Sick Leave If Taken On A Public Holiday You are not required to pay your staff time and a half if they call in sick on a public holiday they would have otherwise worked more.. |
|
Ace Payroll FAQ Contents All the most common Ace Payroll questions grouped by categories in a short table of key words more.. | Ace Payroll Frequently Asked Questions All the most common questions we are asked at Ace Payroll listed in a question format and grouped by category more.. |
More on holiday pays
|
Cashing Up Holiday Pay From 1st April 2011 it is legal for an employee to cash up to one weeks annual leave each year more.. |
Understanding Termination Accruals Handling of accrued holiday pay upon termination can be confusing. Ace Payroll explains the concept of accruals and demonstrates how termination pay is calculated more.. | Holiday 52 Week History It is not absolutely necessary to enter a full 52 week earnings history for correct holiday pay calculation more.. |
| Holiday Pay - Daily Rates An explanation of the calculation of a daily rate for an employee taking holidays after a full years service more.. |
Employee Leave Profile The employee leave profile records which are the normal days worked by an employee more.. |
| Casual Holiday Each Pay This tutorial shows how to have Ace Payroll automatically pay a casual employee 8% holiday pay every time they are paid more.. |
Taxation of Holiday Pay This article shows how easy it is to tax holiday pay according to IRD requirements more.. |
Annual Compulsory Closedowns An annual compulsory closedown is where a business traditionally closes down for a number of weeks each year, usually over Christmas more.. |
| Changing Holiday From 8% Each Pay The procedure for changing a casual employee over to being a permanent employee in Ace Payroll for holiday pay purposes more.. |
Termination Holiday 8% Part Year Payment How to pay the 8% of part year gross for an employee who has been employed for more than a year, receives four weeks holidays a year, and is terminating their employment more.. |
| Holiday Pay Miscellaneous The reason why only full days holiday pay owing is shown on payslips rather than fractional days more.. |
|
Ace Payroll FAQ Contents All the most common Ace Payroll questions grouped by categories in a short table of key words more.. |
Ace Payroll Frequently Asked Questions All the most common questions we are asked at Ace Payroll listed in a question format and grouped by category more.. |
Other leave sections
| Public Holiday Entitlements Ace Payroll receives many calls immediately after every public holiday, asking whether a particular employee is entitled to be paid for the public holiday more.. |
Public Holiday Taken Use this method for an employee who did not work on the public holiday, but would have worked had the day not been a public holiday more.. |
Public Holiday Worked Use this method for an employee who works at any time on a public holiday more.. |
| Alternative Holidays An Alternative Holiday is a day an employee is entitled to take off as paid leave, in return for having worked on a public holiday more.. |
Annual Holiday Entitlements This article looks at entitlements to holidays as provided for by the Holidays Act more.. |
Annual Holiday Payments This tutorial shows how to record holiday pay taken using the Annual Leave method more.. |
| Irregular Work Pattern In this article we look at the calculation of Relevant Daily Pay for an employee that works irregular hours more.. |
Leave Owing Report The Leave Owing report provides an estimate of holiday pay owing to all staff at a selected date more.. |
|
Ace Payroll FAQ Contents All the most common Ace Payroll questions grouped by categories in a short table of key words more.. | Ace Payroll Frequently Asked Questions All the most common questions we are asked at Ace Payroll listed in a question format and grouped by category more.. |
More On Tax Codes and Rates
|
Paying Contractors How to set up a contractor covering items such as tax code, holiday pay and KiwiSaver more.. |
Tax Calculation Bills & Refunds Tax bills & refunds, tax calculation checklist, monthly printed tax table discrepancies more.. |
| Tax Code Entry Entry of tax codes, percentage tax deductions, student loan special tax codes, withholding tax at zero percent etc more.. |
Taxation of Holiday Pay This article shows how easy it is to tax holiday pay according to IRD requirements more.. |
| Monthly and twice monthly PAYE returns
All employers need to pay their PAYE either once or twice a month more.. | Ace Payroll FAQ Contents All the most common Ace Payroll questions grouped by categories in a short table of key words more.. |