Payroll Giving - Process Pay (NZ)

Summary

When you process a donating employee's pay, PayGlobal calculates their tax credit based on their total donation amount in that pay, and it creates a virtual deduction transaction. PayGlobal also transfers bank account details from the Deduction record to the deduction transaction.

Further Reading: See the Payroll Giving manual in the website library.


Warnings	The following table explains Payroll Giving warning messages that could appear in the process pay audit log.
Scenario	Employee has multiple donations so their tax credit is greater than their PAYE amount.
Message	Employee will not get full Tax Credit for these Donations as PAYE is less than Tax Credit – please confirm donation amounts.
Action	Check that the employee is donating the correct amounts.

Scenario	You add a tax credit reversal transaction and create negative tax credits.
Message	Negative Tax Credits have been created for this period, but negative monthly totals cannot be reported on the EMS.
Action	You have to manually check that tax credit being reversed is the same as the original value. You cannot link reversals to the original pay so PayGlobal cannot compare the original and reversed tax credits. You must check the original pay to confirm the original tax credit amount and use a Taxation Override - Tax Credit to correct the automatic tax override calculation, if required

Scenario	Employee has a donation transaction and schedular payments in the same pay. The employee's Tax code = WT or you have paid them an allowance that has Tax override type = "W. Schedular Payments".
Message	Employee is being paid withholding payments, but donations can be made only from salary/wages income. Please check that nett salary/wages amounts are greater than donation amount.
Action	Income from schedular or contract payments cannot legally be used for donations. Check that the employee is not donating any part of their schedular payment income.

Reversals

When you process a donation reversal, PayGlobal creates a negative leave credit, but no PAYE.

Example: In Pay 1, an employee made a $10 donation and got a $3.33 tax credit. In Pay 2, the employee asks you to reverse their donation (-$10) and pay processing creates a negative tax credit (-$3.33) so the employee receives $6.66. However, pay processing does not calculate any PAYE on the $6.66. If Pay 1 and Pay 2 are in the same Tax PTD or EMS reporting period, then the values will cancel each other. If Pay 1 and Pay 2 are in different Tax PTDs or EMS reporting periods, then you would have to send an amendment to the IRD to manually pay the original $3.33 tax credit.

If an employee has a negative income, then pay processing sets their deduction transactions to zero. As a result, when you reverse an employee's pay that includes a donation, you have to set the donation transaction to Recalculate = "No" and enter the required reversal values.