Current Times Update 3
Welcome to Day 1 .. and the sun has come up.
No new updates from the Government in relation to further business support packages as yet. Also nothing from the IRD on tax payments, returns etc.
However by now you should have or be in the process of applying for the wages subsidy. Check out our blog posts for the criteria, process and links.
The only update at present is from the IRD in regards to the tax treatment of the Wage Subsidy when it is received, which is:
- the wage subsidy is NOT subject to GST
- the wage subsidy is also NOT subject to tax
- when paying your employees, you must do the deduct the normal PAYE, Kiwisaver and other deductions as usual
This is where is gets a bit tricky .. when the payment is made to your employee/s, the portion of the payment that is the subsidy, is NOT tax deductible for tax (as the money received is not taxable). So this creates some issues in getting the accounting treatment correct. Haven’t totally worked through this situation with how to do this within payroll systems as yet. But if you do need help with this please contact me.
So there is likely the need to be new codes setup in your accounting system so please contact either myself or Julie if you require those to be setup.
We are currently working on some tools to assist with business planning to get through this so will be in touch.
Remember that we are here on email so please contact us for anything.
Take care and keep safe.