As soon as tax rates/tax tables for a new tax year are made available, the tax data is made available for importing from a hosted location via the Internet. Prior to the start of a new tax year, the tax data for the new tax year must be imported into your system via the Payroll > Maintenance > Tax Period screen. Importing the tax data has the following effects:
a start and end date for the new tax year is automatically created in the system, thereby defining the start and end of the new tax year and allowing pay periods to be created for the new tax year
tax tables/tax rates for the new tax year are imported into the system, thereby allowing the system to apply the correct tax rates when withholding tax during the pay process.
When tax data is uploaded for a tax year, a new row is added to the table on the Portal > Pay > Maintenance > Tax Period/Tax Period & ESCT Maintenance screen, which displays the following information:
start and end date of the tax year
date on which the tax data was imported
name of the user who imported the tax data.
Once the data is imported into the system for a given tax year, it is possible to update that tax data for that tax year at any stage if necessary.
ESCT End of Year Process
The tax period maintenance functionality also allows payroll staff to perform the Employer Superannuation Contribution Tax (ESCT) end of year process. This process updates the ESCT details of payees, who were employed during the previous tax year and were enrolled in the KiwiSaver scheme, in readiness for a new tax year.
The ESCT end of year process causes the system to calculate an estimate of payees' potential earnings for the upcoming tax year so that the ESCT rate for the new tax year can be calculated. On running the process successfully, the following information is updated on the ESCT details for each applicable payee record:
Source - will be set to ESCT Process to indicate that the ESCT values have been calculated automatically by running the ESCT end of year process
Financial Year - will be set to the new tax year to which the ESCT values apply
Estimated ESCT Threshold - displays the payees estimated earnings, as calculated by the ESCT end of year process, for the tax year
ESCT rate - displays the rate at which ESCT contributions will be calculated for the tax year.
This information is displayed on the Portal > Payee > Payee Maintenance > KiwiSaver Details > ESCT Details screen for each payee record.
The process applies to payees to whom all of the following conditions apply:
were paid in at least one pay batch during the tax year for which the process is run
accrued KiwiSaver contributions for that tax year
have a KiwiSaver opt-in date and no opt-out date.
The process will apply to a payee if they meet the abovementioned criteria even if they are subject to a KiwiSaver holiday.