Tax Arrears - TAXA Deduction Element

Tax Arrears - TAXA Deduction Element

Notification from IRD to deduct Tax Arrears Deduction

If you will have received a notification from IRD to deduct an amount each pay for one of your employees. You are required to do this by law. 
Check the details of the Employee name, their IRD number, payday and pay period on the notice, if it is incorrect you will need to contact IRD. 
The date you must start deducting is stated on the notice.
The payment is included as part of the banking files each payroll.
Page 2 of the notice will have the amount owed to Inland Revenue and the amounts you are required to deduct each pay.
The amount to be deducted may recalculate based on the hours worked by the employee.
If your employee has paid off the arrears, and a deduction has been taken in error, your employee will need to contact IRD to claim any refund.
In the Payday that you have been instructed to begin deductions, you will need to add this to their Timesheet Template as a permanent deduction:

Edit a Timesheet Template

  1. People > View People select the Employee's name.
  2. In the Timesheet Template
  3. Enter 1 in the Green Qty box.
  4. Select the Element TAXA - Tax Arrears from the drop down menu
  5. Enter the amount to deduct each pay in the Rate box
  6. + Add
  7. In Balance * enter the total Amount owed to IRD from the notice: 
  8. IRD's bank account and the Employee's IRD # have been completed for you
  9. In Payee Reference enter the Employee's Full Name
  10. In Payee Code enter ARR
  11. Save
  12. When you open the pay, the deduction will be taken.
If you already have a pay open select deduct now to activate the deduction on the current timesheet.

Sample Notice to deduct amounts owed to Inland Revenue



    • Related Articles

    • Child Support Arrears - Deduction Element

      Child Support % Deduction  You will have received a notification from IRD to deduct an amount each pay for one of your employees.  You are required to do this by law. iPayroll has a standard Pay Element - Child Support Deduction - CSD Element. If you ...

    • Child Support Deduction - CSD Element

      Notification from IRD to deduct Child Support Deduction You will have received a notification from IRD to deduct an amount each pay for one of your employees. You are required to do this by law. Check the details of the payday and pay period on the ...

    • Pay Elements: How do I add a new Allowance or Deduction?

      iPayroll handles an unlimited number of allowances and deductions.   Employers can set up Pay Elements that are specific to the type of work or payment structure of the business i.e. Piece Rates, Tool Allowances or Call Out Allowance. Legislative ...

    • Salary Sacrifice Pay Element

      A Salary Sacrifice deduction can be set up to allow you deduct from an employee's pay before any tax calculations are made. Using this type of deduction will reduce a person's PAYE, Student Loan and Kiwisaver calculations and you should seek legal ...

    • Student Loan Deductions

      Notices from IRD  If your employee's tax code is M SL it means that they have a student loan and each pay a percentage of their gross taxable earnings will be used to pay their loan. Part of their earnings are exempt from the calculation, this is ...