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Income Tax Act 2007

General collection rules - Intermediaries - Obligations and treatment of PAYE intermediaries

RP 6: Operation of PAYE intermediaries’ trust accounts

You could also call this:

“How PAYE intermediaries manage trust accounts for employee pay and tax”

If you are a PAYE intermediary, you need to set up a trust account at a registered bank. This account must be called a trust account.

You can put different things into this account. These include:

  • Money from employers for workers’ salaries or wages
  • Money from employers for workers’ superannuation
  • Tax money for salaries or wages
  • Refunds from the tax office
  • Interest earned on the money in the account

You can take different things out of this account too. These include:

  • Money to pay workers their after-tax salaries or wages
  • Money for workers’ superannuation
  • Tax money for salaries or wages
  • Payments that employers would normally make for tax on salaries or superannuation
  • Interest earned on the money in the account

When money for a worker goes into your trust account, you’re holding it for both the worker and the tax office. You need to make sure each gets the right amount.

If the money in the account earns interest, that interest belongs to you as the PAYE intermediary.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1520511.

Topics:
Money and consumer rights > Taxes
Money and consumer rights > Banking and loans
Work and jobs > Worker rights
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“Rules for PAYE intermediary subsidy claims no longer apply”

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“What employers must do when using a PAYE intermediary for payroll”

Part R General collection rules
Intermediaries: Obligations and treatment of PAYE intermediaries

RP 6Operation of PAYE intermediaries’ trust accounts

  1. A PAYE intermediary’s trust account must be named as a trust account and established at a registered bank within the meaning of the Banking (Prudential Supervision) Act 1989.

  2. The deposits to the account consist of—

  3. a payment of gross salary or wages paid by an employer:
    1. an amount of employer's superannuation cash contribution paid by an employer:
      1. an amount of tax for a payment of salary or wages required under the PAYE rules and ESCT rules, or made under section RP 12:
        1. an amount of a refund made by the Commissioner under section RM 7 (Refunds to PAYE intermediaries):
          1. interest on the amount of the funds in the trust account.

            1. The withdrawals from the account consist of—

            2. a payment of net salary or wages to an employee:
              1. an amount of employer's superannuation cash contribution paid by an employer:
                1. an amount of tax for a payment of salary or wages withheld under section RP 12:
                  1. a payment that an employer would be required to make but for the arrangement with the PAYE intermediary, in relation to an amount of tax for a payment of salary or wages to an employee or an employer's superannuation cash contribution made on behalf of an employee:
                    1. interest on the amount of the funds in the trust account.

                      1. A payment relating to an employee that is credited to the trust account of a PAYE intermediary is held by the PAYE intermediary on trust for the benefit of the employee and the Commissioner according to their respective rights and obligations.

                      2. Interest earned in the trust account of a PAYE intermediary by a payment that relates to an employee is held beneficially by the PAYE intermediary.

                      Compare
                      Notes
                      • Section RP 6(1): amended, on , by section 300(1) of the Reserve Bank of New Zealand Act 2021 (2021 No 31).
                      • Section RP 6(2)(b): amended (with effect on 1 April 2008), on , by section 544(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                      • Section RP 6(3)(b): amended (with effect on 1 April 2008), on , by section 544(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                      • Section RP 6(3)(d): amended (with effect on 1 April 2008), on , by section 544(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                      • Section RP 6 list of defined terms employer's superannuation cash contribution: inserted (with effect on 1 April 2008), on , by section 544(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                      • Section RP 6 list of defined terms employer's superannuation contribution: repealed (with effect on 1 April 2008), on , by section 544(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).