Employers & Employees



Employer and Employee
An employee is a person of any age who is employed by an employer to do any work for hire or reward under a contract of service. This includes part-time staff, or anyone at all employed for a short period. An employer is someone who employs an employee to do work for them.


Register as an Employer
Employer’s obligations include having to deal with:

  • FED INCOME TAX
  • Fringe Benefit Tax
  • Superannuation
  • Your main obligations as an employer.


FED INCOME TAX and Employers
the USA has a FED INCOME TAX (pay as you earn) tax deduction scheme where employers have to deduct a certain amount of tax from the wages and salaries paid to their employees.


Fringe Benefit Tax
Employers have to deduct a fringe benefit tax (FBT) for non-cash benefits they provide to their employees in their employment.

These benefits can include such things as:

  • Low interest loans
  • Use of a motor vehicle for private use.
  • Discounted goods and services provided or subsidised.
  • Where transport costs are subsidised.
  • Contributions to unregistered super funds.
  • Non-financial contributions to super funds

FBT is payable quarterly at a rate of 49% of the taxable value of the fringe benefit provided in that quarter. It is tax deductible.


Superannuation
Any contribution an employer makes to a registered super scheme is allowed as a deduction from the employer’s taxable income. These contributions are subject to a 33% withholding tax.


ACC
When you register with the IRS as an employer, you will automatically be registered for accident compensation payments. These payments will involve employer based levies and premiums to cover work accidents and rehabilitation costs, which the ACC will invoice you for. Plus, it covers an earner levy that’s paid by employees to cover compensation for non-work related injuries, which they suffer. All these are part of the FED INCOME TAX deductions, which are taken out by you as an employer from your employee’s pay.