Staff & Business

Tax Obligations if Employ Staff
Employers are responsible for making various types of deductions from payments to people working for them.

Some areas that may concern you as an employer include:

  1. New employers
    If you have anyone working for you, or you intend on employing someone, then you must register as an employer. As an employer you will be responsible for making deductions from payments you make to them, as well as giving information to Inland Revenue.

  2. Types of employees
    For tax and accident compensation purposes, it is very important that you are sure of how to classify the people who work for you. That is, are they employees or self-employed?

  3. Deductions from employee wages
    As an employer you must make the correct PAYE (pay as you earn) deductions from your employees' earnings using the appropriate tax code, meet your filing and payment obligations with regard to PAYE, pay any liable fringe benefit tax (FBT) and specified superannuation contribution withholding tax (SSCWT). Learn about other types of employee deductions and your obligations.

  4. Filing your employer schedule
    As an employer you are required to inform and pay IRD all the deductions you make from your employees' wages by the due date.

  5. Payments to employees
    Employers may make other payments to or on behalf of workers, as well as salaries or wages. Know about tax deductions for these types of payments including: lump sum or extra emolument payments; bonuses; holiday pay and more.

  6. Paying deductions
    You must make payments to Inland Revenue for any deductions.

  7. Records you should keep
    It is your responsibility to keep PAYE related records for 7 years. Know about the records that must be kept and how.

  8. Reporting changes in your status as an employer
    As an employer your circumstances may change. An employee may stop working for you or you may stop providing fringe benefits. Know what you need to do when there is a change in your status as an employer.

  9. Failing to meet your obligations
    If you fail to meet any of your obligations as an employer you may be liable to pay penalties and interest. Know about the penalties that you may be liable for, and your repayment options should you owe money to the IRD.

  10. Disputing an assessment
    If you disagree with how IRD have assessed your tax you can dispute it. There is a dispute process to follow.