1st April 2013 changes for Employers

• 1st April 2013 changes to be aware of as an Employer
• Minimum Wage Changes
• KiwiSaver contributions rate change
• Increase in Student Loan Repayments
• Primary and Secondary School Children Wages / Salaries

1^st April 2013 changes to be aware of as an Employer

Minimum Wage Changes

On April 1 2013 the adult minimum wage will increase from $13.50 per hour to $13.75 per hour and the training and new entrants minimum wage will increase from $10.80 to $11.00 per hour.

There are three minimum wage rates and these are reviewed each year:

• the adult minimum wage applies to all employees aged 16 and over who are not new entrants or trainees
• the new entrants minimum wage applies to employees aged 16 and 17, except for those who have completed 200 hours or three months of employment in the workforce, whichever is shorter; or who are supervising or training other workers; or who are trainees
• the training minimum wage applies only to employees aged 16 and over who are doing recognised industry training involving at least 60 credits a year.

Please note there is no statutory minimum wage for employees who are under 16 years old.

As of 1 April 2013 the adult minimum wage rates (before tax) that apply for employees aged 16 or over will change to:

• $13.75 per hour, which is equal to
• $110.00 for an 8 hour day, or
• $550.00 for a 40 hour week
• $28,600 per annum

The rates that apply to new entrants, and employees on the training minimum wage (before tax), from 1 April 2013 will change to:

• $11.00 an hour, which is
• $88.00 for an 8-hour day, or
• $440.00 for a 40-hour week
• $22,880 per annum

For more information about this go to: http://www.dol.govt.nz/er/pay/minimumwage/index.asp

KiwiSaver contributions rate change

The minimum contribution rate for employers and employees has increased from 2% to 3% of gross salary or wages from the first pay period commencing on or after 1 April 2013. For example if an employees pay period begins on 28 March 2013 and goes through until 03 April 2013 the KiwiSaver deduction will still be at 2%. For the pay period beginning 04 April 2013 through to 10 April 2013 (and all subsequent pay periods) the KiwiSaver rate will be 3%.

Please note you will need to change the contribution rates for existing KiwiSaver members if their contribution rate is 2%. If your employee currently contributes at either 4% or 8% there is no need to change their contribution rate.

The default rate for new employees that are automatically enrolled into KiwiSaver has increased from 2% to 3% of gross salary or wages from the first pay period commencing on or after 1 April 2013.

For more information about this go to: http://www.kiwisaver.govt.nz/

Increase in Student Loan Repayments

From 1 April 2013 the repayment rate for standard student loan deductions will increase from 10% to 12%. For employers, the student loan standard deductions that are reported on the Employer monthly schedule (IR 348/EMS) for the period ended 30 April 2013 and all future periods should be using the 12% repayment rate.

For more information about his go to: http://www.ird.govt.nz/studentloans/payments/

Primary and Secondary School Children Wages / Salaries

From 01 April 2013 all salary/wages that are paid to school children are required to have PAYE deducted (and KiwiSaver if they have enrolled  employees under 18 are not subject to automatic enrolment). You will need to make sure that all children have completed an IR330 form prior to 01 April 2013.

Please note that the above information is a guide only and it should not be substituted for professional advice.