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Tax Changes On 1st October 2010

October 2010 Newsletter

  • Our October 2010 Newsletter ships on Monday 19th July 2010.

  • View the PDF Newsletter online (632KB)

Tax Changes

  • All income tax rates reduce on 1st October 2010.

  • GST increases from 12.5% to 15%.

  • The company tax rate drops from 30% to 28% from the 2011/12 income year.

Income Tax Cuts

Income Tax

Until 30th September

After 1st October

High Rate - annual earnings above $70,000

38%

33%

Mid Rate - annual earnings $48,000 to $70,000

33%

30%

Low Rate - annual earnings $14,000 to $48,000

21%

17.5%

Lowest Rate - annual earnings below $14,000

12.5%

10.5%

Handling of GST Increase

  • GST increases from 12.5% to 15% on 1st October 2010.

  • This change has almost no impact on the Ace Payroll software itself.

  • The only clients who need to make a change are those that pay contractors using Ace Payroll and show the GST in the payroll.

  • For more information see Handling of GST increase in Ace Payroll.

Automatic Payment Reminder

The take home pay of every employee increases due to the tax cuts.

Most clients use the Direct Credit facilities in Ace Payroll in which case do nothing. The new take home pay automatically flows through to the relevant bank accounts.

Some clients use Automatic Payments for salaried staff in which case the amount changes for payments after 1st October.

After filing the last September pay, from Calculate Pays check the new take home pay for these staff.

Contact your bank or use internet banking to update the Automatic Payment amounts.

Remember, if paying by Direct Credit do nothing.

Timing of Upgrade Installation

  • Install the upgrade as soon as possible after receiving the CD.

  • Do not wait until after the 1st October.

  • The upgrade contains tax tables for periods before 1st October as well as after 1st October. The correct rate is automatically selected based on the pay period end date.

The best time is as soon as possible, just after you have filed your regular payroll. In the unlikely event you have problems you have till the next pay period - at least a week - to get it right.

The worst time to install the upgrade is just before your first October pay. In the unlikely event you have problems there is very little time to get it right.

October 2010 Newsletter

  • Our October 2010 Newsletter ships on Monday 19th July 2010.

  • View the PDF Newsletter online (632KB)

What is the best way to direct credit all an employee's nett pay?
To direct credit all an employee's pay to a bank account set the criteria of the last or only account to BALANCE rather than entering the amount of the nett pay.

This way the direct credit is automatically updated if the nett pay changes through tax changes or pay rate adjustments.

For more information see our documentation on Direct Credit Criteria.

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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