Question 9a

Advise on each taxpayers situation in relation to deduction of tax. For each taxpayer:

• specify the correct tax treatment for the payment (PAYE, withholding tax, or no tax)
• calculate the amount of deductions (if any)
• specify the net amount paid to the recipient.

Notes:

• None of the individuals has a certificate of exemption.
• Any schedular payment recipient wants to use the standard deduction rate for their type of work.
• Where applicable, your answer should include ACC earners levy, student loan repayments and KiwiSaver employee deductions.
• Do not include KiwiSaver employer contributions.
• Each payment was made in September 2023.

i. Luke received a monthly salary payment of $13,065. His tax code is M SL. His KiwiSaver employee contribution rate is 4%.

ii. Megan receives a $7,390 (gross) redundancy payment. Her wages during the previous four weeks were $4,925.

iii. Erika is a sound and audio engineer contractor based in Wellington who works on television, film, and video productions. She is a New Zealand tax resident. Her total earnings for September 2023 were $8,960.