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Trusted advisers of all tax compliance and annual accounting issues facing both individuals and small businesses.

Understanding superannuation contributions for small business owners

Posted on Apr 12, 2019 by admin

Employer superannuation contribution tax (ESCT) refers to the tax that is taken from any cash contributions made to your employees’ superannuation accounts, including KiwiSaver. The rate of ESCT to deduct can vary for each staff member, making it necessary to ensure that you follow all of the required steps as an employer.

Firstly, you must work out each employee’s ESCT rate, which is calculated based on the employee’s ESCT Threshold. For the employee’s income for the year ending 31 March, The ESCT rates from 1 April are:

Once you know what rate to use for each person, you can then make the deduction each payday from your gross cash contribution to each employee.

Your ESCT is then paid to Inland Revenue on the same due date as Pay As You Earn (PAYE) and other deductions when filing your Employer Monthly Schedule and Employer Deductions forms. You should contact your financial advisor for further assistance if you are still unsure of your ESCT obligations.

Garry Hughes has been the Orewa North accountant for the past 17 years. The key to this long association has been the efficient manner in which Garry has performed his preparation of our accounts. It has been a pleasure to deal with someone whose working relationship has been friendly and exceptionally flexible when fitting in with the school needs and the ever changing Ministry of Education regulations and reporting requirements. It is good to know that sound financial advice and guidance is only a phone call away.
Bruce LawsPrincipalOrewa North Primary School

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Understanding superannuation contributions for small business owners

Posted on April 12, 2019 by BDS Hughes

Employer superannuation contribution tax (ESCT) refers to the tax that is taken from any cash contributions made to your employees’ superannuation accounts, including KiwiSaver. The rate of ESCT to deduct can vary for each staff member, making it necessary to ensure that you follow all of the required steps as an employer. Firstly, you must work out each employee’s ESCT rate, which is calculated based on the employee’s ESCT Threshold. For the employee’s income for the year ending 31 March, The ESCT rates from 1 April are: 10.5% for $0 to $16,800. 17.5% for $16,801 to $57,600. 30% for $57,601 […]

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