Employing seasonal or casual workers

The Orchardist December 2002
Inland Revenue Department

Over the next couple of months the fruit growing industry will employ thousands of seasonal and casual workers to assist with the fruit picking season.

"We realise that this is a particularly busy time of the year, and many growers will be employing extra staff to assist with the increased work load. If you intend to employ seasonal or casual workers there are a few points to be aware of when it comes to tax,"

says Bruce Thompson, General Manager Service Delivery.

"Making sure that all the required forms and information are completed when you employ staff will save you problems in the future."

Making sure all new employees complete a Tax code declaration (IR 330) form All new employees need to complete a Tax code declaration form on which they choose the tax code that reflects their particular circumstance. As an employer you must deduct the amount of tax (PAYE) that relates to each employee’s declared tax code and pay those deductions to Inland Revenue by the due date each month.

If the Tax code declaration form is not fully completed - for example, if the employee has not provided their IRD number, you must deduct PAYE at the no-declaration rate of 46.2 cents in the dollar (this includes the ACC earner levy).

The correct tax code for casual and seasonal workers For tax purposes, a casual agricultural worker is a person employed in casual seasonal agricultural work on a day-today basis, for up to three months. The person must be employed for the exclusive purpose of doing seasonal agricultural, horticultural , orchard, tobacco farming, market gardening, nursery work or other seasonal work of a similar nature.

Casual agricultural workers should use the CAE tax code. The current rate to deduct is 22.2 cents in the dollar (this includes the ACC earner levy).

For other casual workers, your employee’s tax code tells you which rate to use when deducting paye from their wages.

Agricultural contractors Agricultural contractors are not employees subject to PAYE deductions. Withholding tax should be deducted from payments made to these workers at the rate listed in the PAYE deduction tables and on the back of the Tax code delaration form. However if these workers supply you with a Certificate of exemption (IR 331) you can make payments to them without deducting withholding tax.

Keeping Records As an employer you will need to ensure you have employment records for all casual and seasonal workers.

You will also need to make sure that when your employees start and finish working for you, you show the start and/or finish date for each employee on the relevant Employer Monthly Schedule (IR 348).

"You can get more information from the Inland Revenue website (www.ird.govt.nz) or call them on 0800 377 772 between 8am and 8pm weekdays and 9am to 1pm Saturdays.