Section RD 17 — Income Tax Act 2007: Payment of extra pay with other PAYE income payments

RD 17 Payment of extra pay with other PAYE income payments When this section applies (1) This section applies when a person pays an amount of extra pay to an employee who also receives a PAYE income payment from the person, regardless of whether the extra pay is paid with or separately from a PAYE income payment. The amount of tax for the extra pay is based on the sum of— (a) the amount of the extra pay; and (b) the annualised value of all PAYE income payments made to the employee in the period that starts 4 weeks before the date of the payment of the extra pay and ends on the date of that payment. Calculating annualised value (1B) For the purposes of calculating the amount that is the annualised value referred to in subsection (1)(b), the amount of the extra pay referred to in subsection (1)(a) is excluded. Rates applying (2) For the sum of the amounts referred to in subsection (1) listed in the following paragraphs, the amount of tax for the extra pay that must be withheld is the amount determined using the basic amounts of tax for PAYE income payments set out in the relevant row of schedule 2 , part B, table 1 (Basic tax rates for PAYE income payments): (a) if the sum of the amounts is $14,000 or less, the amount determined by applying row 1: (b) if the sum of the amounts is more than $14,000 but not more than $48,000, the amount determined by applying row 2: (c) if the sum of the amounts is more than $48,000 but not more than $70,000, the amount determined by applying row 3: (d) if the sum of the amounts is more than $70,000, the amount determined by applying row 4. When secondary tax codes apply (3) Despite subsection (2), if the person pays an amount of extra pay to an employee in relation to which the employee has notified the person that a secondary code under section 24B(3)(bb), (c), (d), or (e) of the Tax Administration Act 1994 applies, the rate under schedule 2 , part B, table 1 applying to the extra pay is determined using the formula— extra pay + annualised amount + low threshold amount. Definition of items in formula (4) In the formula,— (a) extra pay is the amount of the employee's extra pay: (b) annualised amount is the amount given by subsections (1)(b) and (1B): (c) low threshold amount is, as applicable,— (i) for secondary code SB, $0: (ii) for secondary code S, $14,001: (iii) for secondary code SH, $48,001: (iv) for secondary code ST, $70,001. Defined in this Act: amount , amount of tax , employee , extra pay , pay , PAYE income payment Compare: 2004 No 35 s NC 2(5) Section RD 17(1) heading: substituted (with effect on 1 April 2008), on 7 December 2009, by section 104(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section RD 17(1): substituted (with effect on 1 April 2008), on 7 December 2009, by section 104(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section RD 17(1B) heading: inserted (with effect on 1 April 2008), on 7 December 2009, by section 104(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section RD 17(1B): inserted (with effect on 1 April 2008), on 7 December 2009, by section 104(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section RD 17(2) heading: substituted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 104(2) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section RD 17(2): substituted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 104(2) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section RD 17(3) heading: substituted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 104(2) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section RD 17(3): substituted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 104(2) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section RD 17(4) heading: added, on 1 April 2010 (applying for the 2010–11 and later income years), by section 104(2) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section RD 17(4): added, on 1 April 2010 (applying for the 2010–11 and later income years), by section 104(2) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).