Q: I just want to check our understanding is correct on the new Taxation Act 2024. I understand it as there is a change to termination pays only. The change is to how we get to the annualised amount to get the correct tax bracket. Instead of taking the past 4 weeks earnings and annualising this plus the value of the extra pay, we now should take the last 2 pay periods, annualise this and add in the value of the extra pay?
But all other extra pays are still based on the 4 week rule for annualising income? https://www.legislation.govt.nz
A: Yes this is a valid change but will be implemented on 1 April 2025. IRD is working on how it will be applied in payroll.