Tax Changes that came in to effect on 1 April 2017

Budget 2016 has introduced tax changes for contractors, and payers of contractors that came in to effect on 1 April 2017.

You may be affected by the changes if:

There have also been changes to incremental late payment penalties and information sharing.

What you need to know if you pay schedular payments:

From 1 April 2017 if you have contractors receiving schedular payments and they want to change their tax rate or if a new contractor starts working for you, you’ll need to give them a Tax rate notification for contractors (IR330C) form instead of the Tax code declaration (IR330) form.

The IR330 should only be given to employees receiving salary or wages.

Variable tax rates

From 1 April 2017 contractors subject to the schedular payment rules can choose their own tax rate when they complete the IR330C, subject to minimums.

If you use payroll software, your software should already be able to accept variable tax rates.

Changes to provisional tax use-of-money interest (UOMI) rules.

  • When determining the interest start date, the Residual Income Tax threshold for individuals using the standard option is now $60,000.
  • This threshold applies to non-individuals.

 The Minimum Wage, effective from 01 April 2017 ( before tax):

Type of Employment Per our
Adult $15.75
Starting-out $12.60
Training $12.60