PAYE - Pay As You Earn

Waged and salaried employees are taxed directly from their income earned. This is known as PAYE (Pay As You Earn), sometimes also called ‘Payroll Tax’. As an employer, you are responsible for deducting and paying PAYE income tax on your employees' behalf.

Employer Responsibilities:

 ⇒  Calculate and deduct PAYE for each pay period.

 ⇒  Send IRD an Employer Monthly Schedule (IR348) and Employer Deductions (IR345).

 ⇒  File Employer Monthly Schedule and make online payments through Accounting4Me.

These are actually easy to perform once you get set up. It’s just that, different rules can apply to different payments such as lump-sum payments, or retirement payouts, or special types of worker’s payments. If you're unsure of what you need to do, speak to Accounting4Me and we’ll give you some suggestions.

PAYE Calculation:

How much PAYE you deduct depends on the employee’s tax code as well as how much they earn. You can do this using IRD’s calculators for both regular and holiday pay.

Filing Tax Returns:

 ⇒  If you pay more than $100,000 a year in PAYE and ESCT, the easiest way to file your PAYE returns is to use Accounting4Me’s online service.

 ⇒  If you use Accounting4Me, your business can also offer employees payroll giving — where they can donate money from their pay towards an IRD-approved charity.

 ⇒  If you need to correct a major error in an EMS, you will need to file an EMS Amendments (IR344) form.

 ⇒  If the error is minor, directly call IRD and get the corrections made over the phone.

 PAYE Dangers:

Do not get your calculations wrong! Try to correct any errors you’ve made through Accounting4Me first before you contact the IRD. Most mistakes are pretty easy to resolve.

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