Q: I do payroll for an early childhood centre who have just received their first payment of the Pacific Immersion Teachers Allowance from the Ministry of Education. We have been advised that the allowance is paid monthly and is influenced by the number of hours each employee worked within the period and is considered taxable income. The Ministry have said they’re unable to provide advice on how the allowance relates to payroll processes so we’re having to put in our own research.

I’m just wanting to double-check that due to the fact it’s based on hours worked in the period and is to be paid monthly, it will be considered nondiscretionary and will have KiwiSaver etc deducted and be included in the holiday pay calculation?

A: Any allowance is an agreed term and has criteria for it to be claimed. So, it would be part of the taxable gross for leave and KS.