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Tax Code Entry

  • Entry of an employee tax code is from the Personnel tab of the Employee Maintenance screen by clicking on Tax Code

  • Tax codes are also entered from the Tax Ready Reckoner accessed from the Utilities menu.

  • The most commonly used codes are shown towards the top of the screen. All tax codes are available by scrolling down.

  • Select a tax code by placing a tick next to it.

  • At the top of the screen is a link to download an IR330 Tax Code Declaration which is needed for new employees.


Percentage Tax Deduction


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.



Plus ACC

You will know the rate is plus ACC Earner Premium because


  • It says so, and

  • The rate is a whole number, such as 11 cents in the dollar, which is 11%


If the rate is plus ACC Earner Premium, select STC ACC Plus as shown above, then enter the percentage value.



Inclusive of ACC

Sometimes the rate specified by the IRD is inclusive of ACC Earner Premium.

You know this because


  • It says so, and

  • The rate is a strange number, such as 29.7%


If the rate is 29.7%, what the IRD really mean is you deduct tax of 28%, plus earner premium of $1.70 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.

Note for 2010/2011 financial year

Note that for the 2010/2011 financial year the situation is confused by the ACC Earner Premium rate being $2.00 per $100 of earnings - a non fractional amount.

For the 2010/2011 financial year take particular care ensuring whether the IRD is specifying the Special Tax Code plus or inclusive of earner premium.


Student Loan Special Tax Codes


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?
  • Use the SL STC code if you receive an IR23 Special Tax Code Certificate asking to deduct student loan at a set rate.

  • When producing printed and electronic employer monthly schedules this code is shown as 'STC' but internally Ace Payroll shows it as 'SL STC' to provide a little more information about the tax code.

  • After entering the Tax Codes screen scroll down to the student loan tax codes. Tick the SL STC code, click over the student loan rate link, enter the rate specified and you are done.


Withholding Tax at Zero Percent


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.


More On Tax Codes and Rates

  Handling of GST increase in Ace Payroll   Student loan voluntary repayments
  Tax Changes on 1st October 2010   Student loan special tax codes
  Tax Code Entry   Tax rates are wrong
  Monthly printed tax table discrepancies   Deduct withholding tax at 0%
  Taxing of holiday pay   Deduct tax at a specified percentage
  Overwriting PAYE deductions   Payroll software IRD compliance
  Overwriting default PAYE & student loan   Twice monthly PAYE returns
  Tax Code entry   Tax cuts in terms everyone can understand
  Alphabetical Index FAQ Questions FAQ Contents Back to top
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 0800 223 729 		Updated: 29th June 2010
Published: 8th January 2010 		Back to top