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World Taxation Data
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Voluntary employer contributions include any contributions employers make:
The calculation for ESCT couldnt be described as simple, but for those employers who wish to make voluntary contributions, ESCT can be taxed in one of the following ways:
ESCT must be paid to Inland Revenue along with PAYE deductions on the Employer deductions (IR345) form.
ESCT is not included on the Employer monthly schedule (IR348). The amount shown as total KiwiSaver employer contributions on the EMS is the net amount - the gross employer contribution less ESCT. The following examples show what should be reported on the IR345 and what should be reported on the EMS (IR348).
Example 1: Employer contribution of 2%
Eddie is a KiwiSaver member and employed by ABC Limited. He is
having 4% of his salary and wages deducted as an employee contribution and
ABC Limited contributes 2%.
Eddie's weekly salary is $900.
From 1 April 2009, as ABC Limited is making employer contributions at the required rate of 2% it isn't liable for ESCT.
Example 2: Employer contributions of more than 2%
Joanne is a KiwiSaver member employed by Black Limited. Joanne has 4%
of her salary and wages deducted as an employee contribution and Black
Limited has agreed, as part of her wage negotiations, to match the employer
contributions dollar for dollar. So Black Limited is contributing 4% as
Joanne's weekly salary is $1,200. Currently she is saving:
From 1 April 2009, as Black Limited is making employer contributions at more than the required rate, it will have to pay ESCT on the voluntary amount. So, for the purposes of calculating the ESCT, the savings are:
|Employer contribution (compulsory 2%)||$24.00|
|Employer contribution (voluntary 2%)||$24.00|
Black Limited is liable for ESCT on the 2% voluntary portion, $24.00. Using the first payment option (a flat rate of 33 cents in the dollar), ESCT is calculated as:
Ratio percentage = [residual income from previous year,
$24.00 x $0.33 = $7.92 - ESCT to pay.
The voluntary employer contribution for Joanne is:
The amount of Joanne's savings would be:
|Employer contribution (compulsory 2%)||$24.00|
|Employer contribution (voluntary 2%)||$16.08 ($24 less ESCT)|
Black Limited should also account for the $7.92 on its Employer deductions form (IR345) form for ESCT and account for $40.08 on its EMS (IR348) as KiwiSaver employer contributions
Example 3: Locked-in employment agreements
In some cases, where an employer is 'locked-in' to an agreement with an employee for a set percentage of employer contributions, in order to meet the terms of that agreement, the amount of employer contributions may need to be grossed-up to ensure that the employee receives their full entitlement.
Speedy is employed by 19 Limited. He is a member of KiwiSaver and his current employment contract requires 19 Limited to contribute towards his KiwiSaver savings at a rate of 4% (matching his own contributions of 4%).
Speedy earns $2,500 gross per week or $130,000 per annum. His weekly savings are:
As 19 Limited is making employer contributions at more than the required rate it will have to pay ESCT on the voluntary amount. So, for the purposes of calculating the ESCT, the savings are:
|Employer contribution (compulsory 2%)||$50.00|
|Employer contribution (voluntary 2%)||$50.00|
19 Limited is liable for ESCT on the 2% voluntary portion of $50.00.
As 19 Limited has agreed contractually to contribute 4%, not 4% less ESCT, it must now gross-up its voluntary employer contribution so that Speedy retains the full 4%.
Using the first payment option (a flat rate of 33 cents in the
ESCT = 0.33 / (1 - 0.33) x $50.00 = $24.63
The gross superannuation contribution of $124.63 is calculated by adding the employer contribution amount received by the scheme provider, $100.00, and ESCT on that amount, $24.63.
ESCT is deducted from the grossed-up contribution, leaving Speedy with net savings of $100.00.
The employer contribution amount 19 Limited should include on its EMS (IR348) is $100.00 ($50.00 compulsory contribution plus $50.00 voluntary contribution in accordance with Speedy’s employment agreement). It should include the grossed-up ESCT amount of $24.63 on the IR345.
WORLD TAXATION DATA
|Bosnia and Herzegovina||10% FBiH, 10% RS ||5% FBiH, 0-15% RS |
|Finland||26%||9-32% national, 16-21% municipal|
|France||33.33%||21% (social charges)
0-50% (income tax)
|Hungary||16%||18% and 36%|
|South Korea||13/25%||9%-21.375% + 36% excess|
11% Social security
|Residents 2.5% Zakat
|Senegal||33%||up to 50%|
|Singapore||18% (17% as of FY 2010)]||3.5%-20%|
|Republic of China||25%||6-40%|
|United Arab Emirates||N/A||0%|
|United States||15-39% (federal)
|British Virgin Islands||N/A||0%|
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