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Accident Compensation Act 2001

Miscellaneous provisions - Offences relating to earner levies

316: Offences in relation to deductions

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“Breaking the rules about taking money from people's pay can get you in big trouble”

If you are an employer, a PAYE intermediary, or a private domestic worker, you must make certain deductions from earnings as required by law. You can get in trouble if you don’t follow these rules.

You might commit an offence if you:

  • Don’t make a required deduction when you know you should.
  • Use the money from a deduction for something other than paying it to the Corporation or its agent.
  • Give wrong or misleading information about deductions to the Corporation or anyone else.
  • Try to stop someone from making a required deduction or make them deduct less than they should.
  • Try to get money or credit for yourself from deductions that should have been made from someone else’s earnings.

If you don’t make a required deduction, you might not get in trouble if you can prove you’ve already paid the money to the Corporation and that you couldn’t pay on time because of something you couldn’t control, like being sick.

If you use deduction money for something else, you could go to jail for up to 5 years or pay a fine of up to $50,000. For other offences, you might have to pay a fine of up to $25,000 the first time, and up to $50,000 for any time after that.

You can’t be punished twice for the same deduction mistake under different laws.

A PAYE intermediary is someone defined in the Income Tax Act 2007 who helps with these deductions.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM103467.

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Part 9 Miscellaneous provisions
Offences relating to earner levies

316Offences in relation to deductions

  1. Subject to subsection (5), a person commits an offence against this Act who,—

  2. being an employer, or a PAYE intermediary or a private domestic worker, knowingly does not make a deduction required to be made under section 221; or
    1. knowingly applies or permits the application of the amount of a deduction made or deemed to be made under section 221 for any purpose other than in payment to the Corporation or an agent of the Corporation; or
      1. knowingly provides altered, false, incomplete, or misleading information to the Corporation or any other person in respect of any matter or thing affecting a deduction required to be made under section 221; or
        1. causes or attempts to cause any employer, any PAYE intermediary or a private domestic worker or other person to refrain from making a deduction required to be made under section 221 or to make a lesser deduction than the deduction required to be made under section 221; or
          1. obtains or attempts to obtain, for the person's own advantage or benefit, credit with respect to, or a payment of, the whole or any part of the amount of a deduction made in accordance with section 221 from an amount included in the earnings of any other person.

            1. A person may not be convicted of an offence under subsection (1)(a) if the person satisfies the court that the amount of the deduction required to be made under section 221 has been paid to the Corporation or an agent of the Corporation, and that the person's failure to make payment of the deduction within the prescribed time was due to illness, accident, or other cause beyond the person's control.

            2. A person who commits an offence against subsection (1)(b) is liable, on each occasion the person is convicted, to imprisonment for a term not exceeding 5 years or a fine not exceeding $50,000.

            3. A person who commits an offence against any of paragraphs (a), (c), (d), and (e) of subsection (1) is liable,—

            4. the first time the person is convicted in relation to a particular type of offence, to a fine not exceeding $25,000:
              1. on every other occasion the person is convicted for the same type of offence, to a fine not exceeding $50,000.

                1. No person may be convicted of an offence under this section in respect of any deduction required to be made on account of the levy payable under this Act (levy deduction) if the person is convicted of an offence under section 143A(1) of the Tax Administration Act 1994 in respect of any deduction required to be made under the PAYE rules, being a deduction which, if the levy deduction were a deduction on account of income tax for the purposes of the PAYE rules, would have included the amount of the levy deduction.

                2. In this section, PAYE intermediary means a PAYE intermediary as defined in section YA 1 of the Income Tax Act 2007.

                Notes
                • Section 316(1)(a): amended, on (applying to obligations under the principal Act that arise on and after 1 April 2004), by section 168(1) of the Taxation (Maori Organisations, Taxpayer Compliance and Miscellaneous Provisions) Act 2003 (2003 No 5).
                • Section 316(1)(d): amended, on (applying to obligations under the principal Act that arise on and after 1 April 2004), by section 168(2) of the Taxation (Maori Organisations, Taxpayer Compliance and Miscellaneous Provisions) Act 2003 (2003 No 5).
                • Section 316(6): added, on (applying to obligations under the principal Act that arise on and after 1 April 2004), by section 168(3) of the Taxation (Maori Organisations, Taxpayer Compliance and Miscellaneous Provisions) Act 2003 (2003 No 5).
                • Section 316(6): amended, on (effective for 2008–09 income year and later income years, except when the context requires otherwise), by section ZA 2(1) of the Income Tax Act 2007 (2007 No 97).