Minimum wage, ACC law changes to take effect on April 1
From April 1, increases in benefits, national superannuation and the minimum wage are in force as ACC levies come down.
The changes are:
- Benefit rates increase by 1.1 percent
- Superannuation rates increase by 1.4 percent
- The adult minimum wage increases by 50 cents to $15.75 an hour
Prime Minister Bill English says new benefit increases are "focused on the protection of children and young people".
"The sound economic management of the National-led Government over the past nine years has helped get New Zealand back on track and in a position to start sharing the benefits of our growing economy with Kiwis," Mr English says.
ACC levy cuts
Whether you're an employer or self-employed, your work levy will reduce by an average of 10 percent over the next two years, compared with 2016/17 rates, business.govt.nz says.
"The levies go down, you'll notice a small amount [of extra pay]," Newshub political reporter Lloyd Burr told The AM Show.
The change has been promoted as a massive drop, but Burr pointed out it was National who made a huge hike in levies when they came into power.
- Annual ACC threshold increases from $122,063 to $124,053
- Maximum ACC levy increases from $1,696.67 to $1,724.33
- Annual student loan repayment threshold for 2017/2018 is $19,136
Minimum wage increases
The current minimum wage is $15.25 an hour for an adult. From April 1, 2017 the new rates will be:
- Adult - $15.75 an hour
- Starting-out - $12.60 an hour (up from $12.20)
- Training - $12.60 an hour (up from $12.20)
Starting-out and training minimum wages are 80 percent of the adult minimum wage.
Employees have to be paid at least the minimum hourly wage rate for every hour worked. Anyone who thinks they are being paid less than the minimum wage should contact employment.govt.nz.
Starting-out workers are people aged 16 to 17-years-old who have worked six months or less with their current employer.
Contractors tax changes
From April 1, the way contractors pay their taxes will change. It's an expansion of existing rules called schedular payments.
These rules previously applied to workers in certain industries like forestry and real estate, who were taxed at a flat rate, business.govt.nz says.
On the new tax rate notification form you pick the rate you would like tax to be deducted at. New Zealand tax residents can pick any rate from 10 percent up to 100 percent, business.govt.nz says.
A more detailed explanation of the new contractor tax is on the MBIE website.