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RD 20C: Payments of recalculated main benefit
or “How tax is calculated on back-payments of main benefits”
You could also call this:

“What to do if your employer doesn't deduct enough tax from your pay”

If your employer doesn’t take out the right amount of tax from your pay, you need to do a few things. First, you must tell the Commissioner about your income. You do this by providing employment income information as required by section 23I of the Tax Administration Act 1994. Then, you need to pay the missing tax amount yourself.

You don’t have to pay the missing tax if you’re not required to pay it or if you’re exempt from paying it.

If the money you get in your pay is less than the tax that should be taken out, you need to pay the difference to your employer or PAYE intermediary. If you don’t pay them, you must pay it to the Commissioner as explained in section RD 4(4).

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Next up: RD 22: Providing employment income information to Commissioner

or “Telling the tax department about money you earn from work”
Next

Part R General collection rules
Employment-related taxes: Paying amounts of tax

RD 21When amounts of tax not withheld or payment insufficient

  1. If, for any reason, some or all of the amount of tax for a PAYE income payment is not withheld at the time it is paid to an employee, the employee must—

  2. provide the relevant employment income information under section 23I of the Tax Administration Act 1994 to the Commissioner; and
    1. pay the amount of the deficiency.

      1. Subsection (1)(b) does not apply if the employee is exempt from paying the amount or is not liable for the amount of tax.

      2. If the amount of money included in a PAYE income payment is less than the amount of tax for the payment, the employee must pay the amount of the deficiency to their employer or PAYE intermediary. If the employee does not pay the amount of the deficiency to their employer or PAYE intermediary, they must pay the amount to the Commissioner under section RD 4(4).

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      Notes
      • Section RD 21(1)(a): replaced, on , by section 207(1) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
      • Section RD 21(3): amended, on , by section 207(2) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
      • Section RD 21(3): amended (with effect on 1 April 2008 and applying for the 2008–09 and later income years), on , by section 263(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
      • Section RD 21 list of defined terms employer monthly schedule: repealed, on , by section 207(3)(b) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
      • Section RD 21 list of defined terms employment income information: inserted, on , by section 207(3)(a) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).