Employment of New Zealand Residents by Foreign entities

Karen Tobeck

Many companies now employ international staff who work from home, requiring more and more organisations to deal with various tax regimes.

New Zealand rules require a NZ resident taxpayer to have PAYE (Pay as you earn) paid on their income whether the employer is a registered business in NZ or not.

To assist overseas entities who are not wanting to register as a NZ taxpayer and who are not operating a business in NZ, there is the ability to have the individual registered as a PAYE payer and the individual pays the PAYE for themselves.

PAYE is required to be notified to IRD (Inland Revenue Department) each time a payment is made to the employee and this can be done by using payroll software which provides IRD with the information at the time each pay is prepared.  Alternatively, this information can be filed online at the time the payroll is prepared.  The payment for PAYE is due on the 20th of the month following wages being paid.

Employers and Employees have a legal responsibility to ensure that payrolls are recorded accurately, and taxes are paid when due. 

When an employee becomes a NZ resident taxpayer is another issue and this requires looking at the Tax treaties and tax residency rules relating to each individual’s personal situation.

At Monteck Carter we have all the tools to assist overseas entities with their taxation issues and can ensure that it is not as onerous as it may look to meet all statutory requirements.


XLNC TFG Newsflash| April 2023

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