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Christmas Payroll Reminders December 2012

December 6, 2012

Tax on Christmas Pays
Additional Allowances and Deductions
Terminating Staff at Christmas
Extra Pays at Christmas
What Does Extra Emolument Mean?
Clear Communications
Timing of Holiday Payments
Going Away – Need to do the Payroll?
Entertainment Expenses (not payroll but still important)
If a single holiday payment is made for a number of weeks, the tax is significantly reduced by apportioning it over those weeks.
If you are paying staff their holiday pay in a single pay at Christmas, and it covers more than one payroll period, your payroll will think the higher earnings are for one pay only and will tax them at a higher rate.  Check the tax and override the tax paid where necessary.  Different payrolls use different methods, give me a call if you’re not sure.
Don’t forget to pay extra allowances and deductions if your staff are on extended leave and receiving a single pay. 
Examples: child support, court fines, loan repayments.
If you terminate staff near a Public Holiday, you are obliged to pay holiday pay plus any statutory days their outstanding annual leave entitlement extends their termination date past
In December, this could be Christmas Day, Boxing Day, New Year’s Day, the Day After.  
Extra pays are taxed at the extra-emolument rate for that employee. 
Examples of extra pays include:  Cashing up Holiday Pay, Cash Bonuses
Not sure how to do it, call me.
extra = more
emolument = salary, wages, fees or benefits from employment
So an extra-emolument is simply an extra payment or benefit.
Thank you to Bell Gully Lawyers for mentioning this one.  If you are going to pay a cash bonus, be clear to your staff about whether you are paying the bonus gross or net of tax.  If you decide to pay a $2,000 bonus, it is best to tell the staff whether it is $2,000 in the hand, or $2,000 before tax.  You don’t want to end up as the Grinch who Stole Christmas, or with a personal grievance on your hands.
An employer must pay an employee for an annual holiday before the holiday is taken
Unless the employer and employee agree otherwise, or the employee is terminated.
If the employee is terminated, you must pay the annual holiday pay in the pay that relates to the employee’s final period of employment.
To help with cash flow, many employees prefer to have their pay continue as per their normal pay cycle.  If you can accommodate them by preloading their pays to the bank, you will take a lot of pressure off Christmas for yourself and your staff  If staff come in to work over Christmas, payroll adjustments can be made in the first pay on return to work. 
Set up a free web connection and do it from anywhere you have a computer and a broadband connection – home, laptop, internet cafe.  Don’t know how, give me a call. 
ENTERTAINMENT EXPENSES (not payroll but still important)
Christmas functions on or off the premises are an entertainment expense.
This means that 50% of the cost is deductible for tax and 50% is non-deductible for tax.  If you do not split the transaction at the time of the event your accountant will need to make an end of year GST adjustment.  You will have GST to pay back.
Best wishes for smooth Christmas payroll processing.
If you are working through the Christmas / New Year period, I will be available for urgent phone or web support at my standard rates.  Please ring or text first as I may not be checking my emails. 


Colleen KingDip
aboutBusiness | PO Box 3756, Christchurch
Business Software and Systems Consultant
providing customised setups of business management solutions
Simplify, Sytemise, Demystify
PS:  Got a friend who’s frustrated with their current business systems?
Just tell them about your experience with us and if they later engage our services, you will receive a $100 petrol voucher. 

Newsletter July 2012

July 26, 2012

Know your entitlements as an employer – Sick Leave
Get your business online for FREE – MYOB Atlas
Closing Soon – MoneyWorks Business Angel Award – $15,000 cash for your business
Annual Accounts    

Know your entitlements as an employer

Sick Leave

With winter upon us, and some major colds and flu around in Christchurch, I read this timely reminder about sick leave from IMS:

A common misconception is that all employees are entitled to 5 days sick leave per year once they had completed 6 months service, whether they are Full Time, Part Time or Casual employees.

However, there is a qualifier:
Employees must have worked an average of at least 10 hours per week including
at least one hour per week or 40 hours per month.

The entitlement is subject to the same test each 12 months – if in any year the work pattern does not meet the above test, then no sick leave entitlement arises.

Get your business online for FREE

Thanks to you can use MYOB Atlas for free for 12 months to build your own business website. It’s easy to use, easy to manage and you can have your own website in minutes not hours.

It’s got everything you need –

  • A personalised domain name ( free for one year
  • Your own business email address to match your domain name
  • Google tools that help you be found
  • Multiple layouts and colour palettes to reflect the personality of your business
  • An online shop so you can start selling
  • A payments page to accept invoice payments online via PayPal
  • Mobile optimised so customers can connect with you from their mobile phones 24/7

You are not obligated to continue after the first free year.

Research tells us that 80 per cent of New Zealanders look online to research products or services before purchasing them, but only 32 per cent of New Zealand businesses have their own website.  Go figure.

Call us if you would like training.

Closing Soon – MoneyWorks Business Angel Award

$15,000 cash for your business 

The MoneyWorks Business Angel Award is looking to reward a deserving business with a $15,000 cash boost.   A business will qualify by just completing an online questionnaire, so long as the judges think your answers sound credible!

As well as $15,000, the winning business will also get:

  • Free MoneyWorks accounting software (if not already using MoneyWorks)
  • One-on-one MoneyWorks mentoring with Dr Grant Cowie (Founder of MoneyWorks)
  • Instant kudos (winners announced in media in September 2012)
  • A seat on next year’s judging panel.

In addition, if you are not already using MoneyWorks, your accountant will receive a full support package to transition your business to MoneyWorks worth over $5,000.

Over the last 2 years I have worked with clients that use the MoneyWorks accounting software for their business.  It works well.

Competition closes 31 July 2012.  Give me a call and I will help with the application.

Annual Accounts

Yes, I can hear you groaning from here.    If you haven’t got the time to prepare everything for your accountant, that’s what I do well.  I know what the accountant requires and can tidy the accounts so it makes your life and your accountant’s easier.  Let me take the angst out of this area for you and be the buffer between you and the accountant, so you can do what you do well.

Don’t forget that I can also do month end accounts reconciliation so that’s it’s not a big hassle at the end of the year.

Call me if you’d like more information on my Business Management Services.

Colleen King, aboutBusiness

Office:  03-359 4231

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occasional indulgences of a fussy eater

The Spreadsheet Page

Colleen King's work blog