Recalculate ESCT Rates (NZ)

Overview

In New Zealand, Employer Superannuation Contribution Tax (ESCT) is a tax on any monetary contribution to a superannuation fund that is paid by the employer for an employee's benefit.

All employer contributions (except to defined benefit funds) are subject to ESCT. For the latest rates, visit the Inland Revenue website.

The ESCT rate threshold is based on the employee's earnings in the previous tax year. It is not a rolling 52-week average.

Important: If you re-employ a previously terminated employee, then you should create a new employee record for them. If you 're-instate' a terminated employee by removing the Termination date from their record, then their ESCT rate calculations may be incorrect.

Recalculate ESCT Rates

You can also update employee ESCT rates by running the Recalculate ESCT Rates command. If you run the Recalculate ESCT Rates command for a new employee who has an ESCT rate value, but no processed pays in the previous tax year, then their ESCT rate will change to 0.00. You must manually enter an ESCT rate value based on the employee's expected income for the current tax year.

Pay Period:

Select the Period, such as Weekly or Monthly.

Employee query:

Select a query that represents employees that have an employment start date that falls BEFORE the start of the last tax year.

Limitation: For employees that started on or after 1 April last year, PayGlobal will attempt to make an estimate of the employees total annual income. However, because PayGlobal does not hold an entire years income, to calculate the correct ESCT rate it is your responsibility to ensure that the ESCT rate is applied from 1 April this year.

Please review the rates that have been calculated and update manually if necessary.

Start date for ESCT rate calculations:

Date from which the recalculated ESCT rates apply. For example, if Pay Period = "Monthly", then the start date could be 01/01/2011.

Preview Only:

PayGlobal produces an audit log of the proposed changes.

Run Update:

PayGlobal recalculates ESCT rates and produces an audit log of the changes.