Accounting4Me - Tax Test
NZ Tax Type Test
Time to find out how much you know about tax types for businesses and self-employed. Answers and explanations are given at the bottom.
1. Employers' compulsory KiwiSaver contributions are taxed.
2. The standard GST rate is...
3. The annual turnover of my business is less than $60,000, therefore...
a) I must register for GST.
b) I don’t need to register for GST.
c) I only need to register for GST if I sell food.
4. The date set as the standard year-end for business is...
a) 31st December
b) 01st Jan
c) 31st March
5. The full form of ESCT is...
a) Employer Superannuation Contribution Tax
b) Employee Superannuation Contribution Tax
c) Employment Superannuation Contribution Tax
6. The one responsible for sending the IR330 form to IRD is...
a) the employer
b) the employee
c) neither employee or employer
7. The employer needs to calculate PAYE tax...
a) at the end of the tax year
b) when they do their payroll.
c) when IRD asks them to.
8. Your new employee doesn’t want to join KiwiSaver. What must you do as an employee?
a) Forward the employee’s opt-out form to Inland Revenue
b) Make KiwiSaver contributions for the first two weeks
c) Refund any deductions made but not yet sent to Inland Revenue
d) All of the above
9. If the IRD asks your company to pay child support from one of your employees’ wages, but, the employee asks to stop the payments. What should your company do?
a) Stop immediately
b) Keep making them
c) Tell other staff about the request
10. If your company was offered a new tax code for an employee, can the employee request you to keep using the original code?
Employers need to calculate Employee Superannuation Contribution Tax (ESCT) — on any KiwiSaver contributions.
The standard GST rate is 15%, but some goods and services are charged at 0%. These are typically goods and services from New Zealand sold overseas. Some supplies may be exempt from GST, most commonly renting a dwelling as a private home.
I do not need to register for GST.
You must register for GST as soon as you think you’ll earn more than $60,000 in a 12 month period. If you choose to register when you earn less than that, you must charge GST on sales, and you can claim GST on purchases.
Businesses can apply to Inland Revenue to change that date, but they need to have a very good case and meet certain conditions.
Employer Superannuation Contribution Tax
ESCT is the tax the employer pays on their compulsory contributions to superannuation schemes, eg KiwiSaver.
Neither employee and employer
All employees must complete an IR330 form and return it to their new employer before they start work. The employer keeps the form for their wage records.
When they do their payroll
Employers must deduct PAYE and related deductions for each employee on their behalf, paying their PAYE to Inland Revenue.
All of the above
The employee can tell Inland Revenue directly. But it’s a good idea for employers to know what they must do if an employee gives the form directly to the company.
Keep making them
By law, employers must deduct child support payments from wages when Inland Revenue tells them to and keep doing it until Inland Revenue tells them to stop.
Inland Revenue can tell an employer to change a tax code. But an employee may know their situation better and insist on their employer using the original code by submitting an IR330 form.