Taxes... With-holding etc... help

[placidfemme]

I'm having a few issues with my pay this year. I'm not really sure what the fuck my boss is doing.

I have a Student loan, which makes my tax code "MSL". When I started here last year I put "MSL" on my tax form and handed that to my employer.

Yesterday he gave me an updated payslip (which I only recieve when I ASK for it... and its a yearly breakdown not a weekly one, which makes it a bit confusing for me to work out whats going on.

Anyway, the first week of work I got paid $40 less than my weekly average last year, my second pay was another $30 short (now $70 short compared to last year...) and then last week I got a another $30 off my pay (so I'm now loosing $100pw).

I queried my boss about this and he said it had something to do with IRD and my student loan. Something about IRD sending him a letter stating that I'm not paying the correct amount towards my Student loan and so he needs to increase it by 10%.

I asked to see this "letter" from IRD and was told it may take a while due to the letter being sent to the accountant and not my boss directly (I don't see what this has to do with anything). I got the feeling he was brushing me off.

So this morning I called up IRD and told them how much I am earning on my base pay (not including commissions) and asked them to work out my taxes and tell me how much I "should" be taking home after tax (see here: https://interact2.ird.govt.nz/forms/payecalc2007/)

Now from what that calculator works out my boss is actually correct to a certain degree, in the sense that he is only short paying me by about $30 a week.

I asked IRD to check my student loan and confirm my payments for last year. They recieved ZERO payments towards my student loan for the whole of last year

They also said that I'm on TWO tax codes. I'm on MSL for part of my taxes and "With-Holding" tax for the rest of my pay.

They told me that with Withholding Tax I will need to full out a IR3 (or something) form and pay my own taxes yearly... WTF???

Should my boss have told me about the with-holding tax? I didn't agree to this, and I certainly havn't kept any money aside to pay the tax on my withholding whatever the fuck it is...

I'm really shitty about this Not only has my student loan not been paid for a year but now I also have to fork out more $$ to pay taxes that should have been paid anyway...

Any advice???

[Mrs Busa Pete]

I would seek union advise hear sounds like you are being ripped of or the labour department. The other thing is that it is illegal for them not to give you a pay slip. You should get onto this quick smart. One other thing are you self employed that is only reason that i know that you have with holding tax.

[placidfemme]

I would seek union advise hear sounds like you are being ripped of or the labour department. The other thing is that it is illegal for them not to give you a pay slip. You should get onto this quick smart. One other thing are you self employed that is only reason that i know that you have with holding tax.

Well... As far as I'm aware I'm not Self Employed.

The thing is with this company is that we (4 of us) started this company from the ground up last Feb. We started off working from my bosses apartment and have now worked our way to where we are.

The first 2 months we worked for him we didn't recieve pay under the understanding that until our sales come through the "company" had no money. Which was fine we were prepared for that and we agreed to that. When we first started getting paid (I had already fulled out the IRD form with "MSL") my boss wouldn't confirm if we were being taxed or cash under the table. Having gone for 2+ months with no money coming in (living off my pay-out from bike insurance when I wrote it off) I didn't ask questions as the insuance money was running thin.

Once our sales started coming in and things were picking up I requested a contract, along with weekly payslips and for my pay to be put into my bank account.

Now... months later, still don't have a contract, still not getting payslips and still recieving cash each week. I hassled him non-stop last year about this, and due to financial issues recently Sam and I can't deal with this bullshit anymore. I've put a lot of effort into this company, moulding and running the telemarketing department and the admin department myself from scratch to an efficently running business.

I know that my boss is having issues with IRD (long story - not relating to this business) and I want to confront him about this today but then I'd have to admit I called IRD which may make him shitty... But I don't know anything about "with-holding" tax and he could speel off a bunch of bullshit and I won't know if what he is saying is true or not. Which is my problem...

So do only Self Employed people with--hold tax?

[yungatart]

With holding tax is paid by people who earn commissions. If you earn commissions you are self employed.
Self employed people who do not earn commissions do not pay withholding tax
Go and see an accountant - Citizens Advice Bureau often have those sort of services free for a first consult.
Sounds to me as though it is a lack of communication on your employers part - or perhaps you weren't listening to that bit.
Do you have a contract - it should all be explained in there.

[Karma]

Well if he's been taking tax off you, but not paying it, he's pocketing it.

Front him up about it.

[placidfemme]

With holding tax is paid by people who earn commissions. If you earn commissions you are self employed.
Self employed people who do not earn commissions do not pay withholding tax
Go and see an accountant - Citizens Advice Bureau often have those sort of services free for a first consult.
Sounds to me as though it is a lack of communication on your employers part - or perhaps you weren't listening to that bit.
Do you have a contract - it should all be explained in there.

I earnt commissions at both my previous jobs (Telemarketer & then Telemarketing manager), and they never did any withholding tax thing for me. My tax stayed the same (MSL) for the combined 5 years I worked at those two jobs.

It does sound like a lack of communication. I pay attention to every detail when it comes to commissions, pays and so forth. I'm not only looking out for my own job but I'm also very focus on getting my staff (Telemarketers) as much money as they deserve too. Nothing was mentioned in regards to my commissions or my staff's commissions. The first time I've ever heard "with-holding tax" was this morning on the phone to IRD.

As I've stated, I don't have a contract or agreement of any sort.

[placidfemme]

Well if he's been taking tax off you, but not paying it, he's pocketing it.

Front him up about it.

I will be once he shows up at the office.

[pervert]

If you earn commissions you are self employed.

What garbage!

I've been earning commission in my job for 6 years and I'm not self employed. I'm starting a new job next week where I earn commission as well, and I won't be self employed there either.

As I've stated, I don't have a contract or agreement of any sort.

Then get one sorted, quickly!

[Mrs Busa Pete]

Well i still think you should ring the labour department. And inland revue and explain to them that he has been bee taxing you and also taking your student loan money and that you have been told that he has not payed it to them. You really need to talk to people in the know ie labour department before you confront him so that you a sure of you facts before hand.

[jrandom]

(a) Your boss is fucking you over. Talk to an accountant. Cover your arse. This could turn to shit very quickly, and believe me, the IRD doesn't GAF either way. You don't want to be left holding the tax bill.

(b) Don't do another day's work without a written contract, and let this be a lesson to you not to work without a contract again, even in a business that may have started as a joint venture between friends.

[imdying]

Cover your arse. This could turn to shit very quickly, and believe me, the IRD doesn't GAF either way. You don't want to be left holding the tax bill.

YOU DO NOT WANT TO BE LEFT HOLDING THE TAX BILL.As the man says, the IRD does not give a fuck, they just want there money, and they will get it.

[Guitana]

You should've been notified by written letter if the deduction from your pay was going to increase and you should've got a copy from your employer of the letter that IRD sent you to confirm that this was the case!!
You need to contact IRD direct and talk to someone about the deductions being taken from your wages.
Don't accuse your boss of anything until you find out the facts or it might blow up in your face!

[Ixion]

If you are an employee, then your employer is obliged by law to deduct PAYE from your earnings. How these earnings are calculated (ie, wage rate per hour, salary per month, commisions, any combination thereof ) makes no difference. You can be paid entirely by commission but still be an employee This is quite common.

The other possibility is that you are not an employee, you are a self employed contractor. In this case usually, you will be responsible for making you own tax payments. Normally you will invoice the person you are working for , they will pay your invoice (normally you will charge GST also), and you will pay icome tax (on an IR3) once a year. The worker will have a contract with the employer .This is the typical scenario for contracted tradesmen, and is common in other industries, eg IS.

Because of problems caused by employers trying to claim that employees are actually contractors, IRD has rulled that in certain industries *(there is a list - I will post it when I find it), the employer must make tax deductions (normally at 20% ) even if the worker is on contract . These are called withholding paymenst or deductions . The worker is still liable to sort out their own tax, the reason for the withholding payyments is that too many people were gettign a horrible surprise at the end of the year when they ahd a huge tax bill they were not expecting and had no money to pay it.
IRD are quite fussy about the distinction bewteen an employee (paying PAYE) and a contractor (paying their own tax and/or withholding payments). You can't just decide to be whichever you want. There are some criteria here http://www.ird.govt.nz/resources/fil...b654/ir336.pdf

Based on what you say, I would be surprised if you were not an employee, though every situation must be assessed in its own right. If you are an employee then your employer MUST deduct PAYE from all earnings , including commission, at the rate on your tax declaration (MSL in your case).

Whether you are paid commission has nothing to do with whether you are self employed and liable to withholding tax .

I suggest that an initial step would be to contact IRD, explain your situation and ask for an opinion whether you are an employee or self employed. If they consider you an mployee then all is simple. (for you, maybe not for your boss !)

[crashe]

Do as the others have said.......

But also take someone with you to the meeting with your boss.
Someone who knows about this IRD/with-holding tax stuff, who can back you up and also not let him fob you off and talk all over you.

You really do need someone there with you in this meeting.

[Macktheknife]

As I've stated, I don't have a contract or agreement of any sort.

PF, go immediately to an employment law specialist, seriously. I know a good one if you like.
It is illegal to not have a contract for employment, your employer has an obligation to provide you with an employment contract, payslips and information on a regular basis. This person is screwing you over, and IRD will take it out on you. Get a lawyer fast.