Kiwisaver teething problems
March 31st, 2008 at 2:11 pm by David FarrarThe Herald last week reported on teething problems with KiwiSaver, which has compulsory employer contributions kick in tomorrow.
These are somewhat more than teething problems, they have been causing huge problems for accountants and employers up and down the country. It is a classic example fo what happens when a Government makes last minute changes without proper consultation.
I know a bit about this, because an accountant told me about it a couple of months ago. Basically what the Government had done was make the employer tax credit of around $20 a week a daily tax credit. Instead of just making it say $20 a week or $1040/12 a month they said employers have to calculate it on actual days employees have worked.
The problem is PAYE is calculated monthly or twice a month. And in case you have not noticed, months vary in length.
What it means is that rather than having a standard amount every PAYE schedule, it will vary all the time. Now that may not sound much work, but trust me the complexity have been driving people mad.
The good thing is the Government is now going to change things, but then again you have a last minute change. This means that payroll software companies may only have days instead of months to properly test software updates.
March 31st, 2008 at 3:32 pm
Meanwhile, all our money is making interest for the Govt in the IRD coffers.
Vote:March 31st, 2008 at 3:37 pm
Ahh Yet more intended and unintended consequences by pollies and their ‘advisers’ who refuse to speak with and listen to those who know whilst rushing in where angels fear to tread.
Why or why will these dim bulbs never learn Consult with those who know twat brains and save the waste of time effort and money.
Vote:March 31st, 2008 at 4:18 pm
Oh the faith we have in accountants these days.
Imagine not being able to work out numbers. Must be a hard thing tapping into a calculator or a computer and doing what you are trained to do.
My accountant laughed when I told him people were finding this hard. As he said, the indignity of not knowing how to do one’s job is just too much for some people and they look to blame someone.
But then accountants hate shifting variables, you just never know which column to put them in.
Vote:March 31st, 2008 at 4:23 pm
Also taken into account it being a leap year this year and not the next.
I agree – why not just $20.00 a week as this would be simple, rather than relying an calculation based on how many days in the month and the associated rounding issues.
Vote:March 31st, 2008 at 4:24 pm
Paul most of the policy wonks advising the Gumint are BAs in political science or economics. Not accountants thats the problem If dimbulb Sullen had asked an accountant they would have explained the bloody obvious that the calc needs to take account of actual pay periods.
Not rocket science Except to a former history lecturer.
Vote:March 31st, 2008 at 4:25 pm
Fletch your comment about earning interest for the government is untrue.
Your money while with the IRD is earning interest for YOU.
Create you own kiwsaver login account at the IRD and check all the ingoings and outgoings and the IRD interest added
https://www2.kiwisaver.govt.nz/secure/login.html
Im stumped by the bit where DPF says some are paid bi monthly. Highly unlikely
Most people are weekly or 2 weekly which have 5 or 10 days ALLWAYS.
Vote:The others are paid monthly which does have a variable amount of days to be sure but not impossible to work out in advance
March 31st, 2008 at 4:27 pm
dg,
who are ‘wonks’ and ‘Gumint’ and ‘dimblud’ and ‘sullen’?
Forget accountancy, economics or even History, could I suggest year 3 english (you know the stuff that teach you in primary school).
And we’re meant to take this sort of reply seriously?
Vote:March 31st, 2008 at 4:29 pm
Ghost,
yeah it’s very hard to sit down and work out how many working days a month there are in each calendar month.
It took me all of 10 seconds on iCal to work out there there were 19 working days this month, and if you live in Taranaki there were 18, that is if you are paid monthly in the ‘naki.
Vote:March 31st, 2008 at 4:39 pm
Doesnt the IRD employers schedules ( which are monthly for small employers) end on the last friday of the month.
Anyway that is what I use. That way all ‘IRD’ months have either 4 or 5 weeks ie 20 or 25 working days
The pedantic will spend the lives actually working it all out on the year based on the sidereal year
The sidereal year is the time for the Earth to complete one revolution of its orbit, as measured in a fixed frame of reference (such as the fixed stars, Latin sideres). Its duration in SI days of 86,400 SI seconds each is on average:
365.256 363 051 days (365 d 6 h 9 min 9.7676 s) (at the epoch J2000.0 = 2000 January 1 12:00:00 TT).
http://en.wikipedia.org/wiki/Year.
Then there is the draconic year !!
Vote:March 31st, 2008 at 4:53 pm
Paul I will have you know Sir that I achieved 66% in School Certificate English many years ago.
Its just the bloody key board of a typewriter thingy is more than I can master.
Give me pen and paper any time.
Vote:March 31st, 2008 at 4:56 pm
will the pen and paper stop you from using childish names?
Vote:March 31st, 2008 at 5:11 pm
But not quite so easy to go and change all your software systems to take account of this and automate the system so that it correctly accounts for regional holidays, leave days, leap years, shift patterns etc etc.
Vote:March 31st, 2008 at 5:17 pm
as someone involved in payroll (I work for a payroll company) there is an obligation to get it right not just near enough. All sorted for 1 April but lots of long hours by developers and testers to be ready – never an ideal situation.
But if you think Kiwisaver is bad, try the changes to youth rates – now if you are over 16 but less than 18 the employer needs to keep a record of both hours worked (both for the current employer PLUS any previous employers since the employee turned 18 AND any concurrent employers) and period employed. Once the employee has worked 200 hours (accumulated across ALL employers) or 3 months (with the individual employer) then they are entitled to the minimum wage. Try programming for that, not to mention explaining to customers.
Vote:March 31st, 2008 at 5:20 pm
Part of the problem is that the employer tax credit is based on the days per month and the amount is a fixed $20 max per week in payments
look here for the details
http://www.ird.govt.nz/kiwisaver/employers/administering/employer-tax-credit/
Examples for employer contributions of $20 a week
If there are … then the actual employer contribution amount is … and the maximum claimable monthly employer contribution amount is … then the monthly ETC claimed is the lesser amount, which is …
4 weekly pays in a 30 day month $80.00
($20.00 x 4 weeks) $85.71 $80.00
5 weekly pays in a 31 day month $100.00
($20.00 x 5 weeks) $88.57 $88.57
2 fortnightly pays in a 30 day month $80.00
($40.00 x 2 fortnights) $85.71 $80.00
3 fortnightly pays in a 31 day month $120.00
($40.00 x 3 fortnights)
$88.57 $88.57
The table is a lot tidier on the web page
Remember the tax credit is based on the ‘days per month’ while the amount paid is generally based on the weeks per month
Vote:March 31st, 2008 at 5:52 pm
It may be simple to work it out each month per payee on a calculator. A lot different to program a payroll system to ensure that every variable is considered and included. It is obvious who the policy writers without basic analyst skills are.
Vote:March 31st, 2008 at 6:42 pm
gd – dead right, yet another fuckup showing a lack of care in implementation. if it were you or me, some wanker in a grey suit (probably that pious dickhead Paul) would be happily looking forward to siccing the IRD dogs on us, but because it’s the Government, they can just go home to their slippers and their nightly dose of Coro and forget about it.
Vote:March 31st, 2008 at 6:45 pm
Off the topic David, Labour/Green party supporters have hjacked your poll ” Who would you vote for………
Vote:March 31st, 2008 at 8:13 pm
Firstly Ghost have you seen the rate that the IRD pays you for interest one money they are sitting on? its no where near the use of money they charge you if you don’t pay on time.
Also this isn’t the real problem. The IRD is taking months to transfer the money from their accounts in the Kiwisaver schemes. There is also big discrepencies between what people are paying out and what the IRD are recording.
Vote:March 31st, 2008 at 8:45 pm
simo– right on , dpf what has happened to General Debate ? And am I the only one experiencing slow reaction time to posting ?
Vote:March 31st, 2008 at 8:48 pm
simo +0 Says:
March 31st, 2008 at 6:45 pm
Off the topic David, Labour/Green party supporters have hjacked your poll ” Who would you vote for………
How unsuprising, whats that burning I smell?
Vote:March 31st, 2008 at 9:12 pm
All that extra work? Must do wonders for our productivity stats…
Vote:March 31st, 2008 at 9:16 pm
Haha the nitwit Liarbour/Greenslime shit gobblers have hijacked a poll . What cowardly demented creeps these spineless jellyfish idiots are. Anyone that voted for either party needs a lobotomy or electrodes up the farter.
Edit: of course metaphorically speaking, as not to offend the demerit gamekeeper?
Vote:March 31st, 2008 at 9:33 pm
DPF’s poll is a little like the Zimbabwean election!! The result can’t be trusted!!!
Vote:March 31st, 2008 at 9:34 pm
come on d4j, hijacking polls does nothing but create something to write a post about, obviously this is from the right.
Vote:March 31st, 2008 at 10:38 pm
buggerlugs,, come on, if an accountant can’t work out the days in the week, month or year in five minutes for the whole year ahead, then I would seriously question the ability of the profession.
Dad, how in your insane, and lets face it far from reality world of yours, is people voting with a click spineless? There was a vote, word got out and people voted, how bloody democratic could you get. And how is it that at least every other post you bring bottoms into it? You are fixated with bottoms and it’s a little bloody unhealthy. Besides, what a pathetic attempt at ridicule, you are even bereft in that department, your put downs are even comical.
DPF gave democracy to the site and the vote didn’t suit your ideals, poor diddums. Besides, where the hell are all of your supporters, why haven’t they been amassed at the border to make a counter vote swell. Don’t tell em the mottled collection of ultra religious conservatives, the insane, and libertarians seething together as the ‘informed’ cyber right is actually just a couple of dozen people. Kinda puts the bleating about deaths of freedoms of speech etc into context, not to mention the march down queen street in the name of democracy.
Vote:April 1st, 2008 at 6:56 am
You guys don’t ge the point. All the extra math involved will mean another 3623 staff will be required at IRD. Because these goverment jobs are so sort after that is why there are no fruit pickers any more.
Vote:April 1st, 2008 at 8:06 am
This is fun. Having seen the calcs and done tax law drafting I know the problem. Any change is likely to be more difficult, as it is presently designed to spread the $20 weekly ETC fairly over the period. Tax handling requires equity and may be complex to avoid anomalies. This is only the start.
Vote:April 1st, 2008 at 9:04 am
Paul: DPF gave democracy to the site and the vote didn’t suit your ideals, poor diddums.
It is interesting to note that the poll has been up for a few days. For a mostly right wing site it was showing the expected result. Then, in a sudden flurry, the current government’s parties flew up the rankings until they outnumber others by 10 to 1. And knowing that Labour party supporters have been ticked for manipulating on-line polls before, it’s not a stretch to say that it is quite likely that they have done so again. Especially when you consider how out of touch those results are with the reality of polling done currently. But hey, I don’t need to taste it to know it’s shit. The smell was enough and what I expected from Labour and it’s supporters. Cheat. Lie. Whatever to keep hold of those reins.
Edit: /lol. Paul – have a look here.
http://www.kiwiblog.co.nz/2008/04/19416.html
Maybe there’s nothing wrong with D4J’s assertion, eh? Maybe it is your world that’s a touch removed from reality. Face it mate, Labour, the Greens and a number of their supporters are indeed spineless, gutless manipulators who will stoop to any low. Makes you think a bit – doesn’t it? How can you trust such a corrupt pack of liars?
Vote:April 1st, 2008 at 10:32 am
Buggerlugs Yes I have had to deal with said IRD types and Paul gives a very good impression of being one of them.
Devoid of common sense Nit pickers unable to see the big picture Stuck in their policy manuals. Causing huge unnecessary cost to employers.
Said example is a classic case of complicating what should be a very very simple process. Why Well the more complicated you make it the more chances of an employer getting it wrong so they can be punished
Also allows for employing more civil servants to check and recheck the schedules so as to justify teh extra taxes neede to be raised to pay for said civil servants
All standard MO
Vote:April 1st, 2008 at 11:44 am
Labour, the Greens and a number of their supporters are indeed spineless, gutless manipulators who will stoop to any low. Makes you think a bit – doesn’t it? How can you trust such a corrupt pack of liars?
Its just that national seem to take every chance they can to show how much more corrupt, and how many more likes they are willing to tell. National, the party of liars and thieves, simple as that.
Vote:April 1st, 2008 at 12:49 pm
Imagine dealing with a temp agency pay roll.
Vote:When do you enrol the staff in Kiwisaver as they come and go and when they start (register) with the agency they often have no idea of:
: how long they will work with the agency
: whether they will ahve regular work with the agency
: what their income may turn out to be