Using a CAE pay as you earn tax code in NZ QuickBooks payroll module

Legacy KB ID: 4835

Question

I employ a “Casual Agricultural Worker” and I have been advised by the Inland Revenue Department that I must apply the CAE tax code to their earnings.  I cannot find a CAE tax code option in Reckon Accounts.  How do I process this pay?

 

Answer

There are a number of special categories of employees who are taxed in a different manner to the normal PAYE system.  See:  https://www.ird.govt.nz/payroll-employers/make-deductions/special-workers/emp-deductions-special-workers.html#caw for full details.

In most cases, these special category workers are taxed at a flat rate.  The relevant tax rate is published by the Inland Revenue Department at: https://www.ird.govt.nz/payroll-employers/make-deductions/withholding-tax/emp-deductions-salaries-wt-activities.html.

These special tax rates are handled in Reckon Accounts under the WT tax code.

 

Workaround

1.    In the Employee Record, change tabs to Payroll & Compensation Info and click on the Taxes button;

2.    In the Tax code box, click the dropdown arrow and select WT;

3.    In the lower section in the Tax % box, enter the appropriate flat tax rate;

4.    Click OK to save.

 

Additional Information

Users should check whether the employee is liable to pay the ACC Levy and whether the published tax rate includes the ACC Levy.  Make adjustments to the tax rate accordingly. 

 

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