'Inland Revenue has ensured they know what to do and are ready to go'
More than 240,000 employers and payroll providers in New Zealand are set to comply with the government's sweeping changes to tax policy on Wednesday.
The policy hikes the personal income tax thresholds as a form of relief for 3.5 million individuals across the country, according to the New Zealand government.
"Delivering this tax relief to employees requires more than 242,000 employers and more than 120 payroll providers to be ready," Finance Minister Nicola Willis said in a statement.
"Inland Revenue has ensured they know what to do and are ready to go. I'm advised by IRD that Digital Service Providers across New Zealand are well on track with development and testing of their changes in final stages."
According to the government, the Inland Revenue Department (IRD) has worked with payroll providers, government agencies, large entities, tax intermediaries, and employer associations to ensure they have all the information their need to update their payroll systems in time.
Update on tax changes provided
Employers using payroll software should have received an update from their providers over the changes, the IRD said.
"If you file manually or don't use a software provider, make sure you use the new tax tables in your calculations," it added.
Source: Inland Revenue Department
Revenue Minister Simon Watts said more information about the changes and what employers need to do are available on the IRD's website.
Other tax-related changes
In addition to the tax threshold changes, the government is also increasing the in-work tax credit by up to $50 a fortnight.
"Alongside this, eligibility for the up to $20 per fortnight independent earner tax credit – which is for people who do not receive a benefit or Working for Families – has been extended to people earning up to $70,000 of income per year," Watts said in a statement.
According to Willis, 94% of Kiwi households will be "better off" when the updated tax package takes effect this Wednesday.
"To find out how much you and your family will benefit, use the tax calculator at Budget.govt.nz," the minister said.
