Employee share schemes and shadow payrolls: Impact from New Zealand tax changes

    Aug 14, 2019 @ 03:30 PM / by Jeremy Piccoli


    Country Tax Update: New Zealand  

    There has been a small increase in the maximum contribution to the Accident Compensation Levy. The net effect is a small increase in tax for higher incomes. To simplify and modernize New Zealand’s tax administration, effective April 1, 2019, employers are required to file “employee income information” every pay cycle.

    Previously, non-resident and resident individuals deriving income without tax withheld at source were required to make a self-assessment of their New Zealand tax liability. 


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    What is the net effect of these tax changes?

    Under the change, the Inland Revenue will prepare and issue pre-populated accounts to individuals based on income reported to the Inland Revenue by a third party, such as employment income. Inland Revenue will then finalize an individual’s account and make an assessment for the tax year.

    The information required to be electronically transmitted will affect nearly all employers, and the change in reporting requirements is particularly important for those with employee share schemes and those running shadow payrolls.


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    Topics: International Tax, Data Points, Insights and Experience, Tax, International Tax Summaries, International Tax Guide, Residual Tax, Double Tax Relief, New Zealand

    Jeremy Piccoli

    Written by Jeremy Piccoli

    Jeremy joined AIRINC in the fall of 2012 and is responsible for managing AIRINC’s International Tax Guide and tax calculator products, as well as consulting with clients. Prior to joining AIRINC, Jeremy spent more than 6 years with PricewaterhouseCoopers’ International Assignment Services practices in Hartford and Boston, providing tax compliance and consulting services to multinational companies and their expatriate population. He received his B.S. with a concentration in Accounting and a Master of Science in Accounting from the University of Connecticut. Jeremy is an Enrolled Agent, a federally licensed tax practitioner who specializes in taxation.