Child Support Deduction - CSD Element
Notification from IRD to deduct Child Support Deduction
You will have received a notification from IRD to deduct an amount each pay for one of your employees. You are required to do this by law.
Check the details of the payday and pay period on the notice, if it is incorrect you will need to contact IRD. The date you must start deducting is stated on the notice and they can amend the amounts to deduct during the year. Child Support has priority over any other deductions after you deduct PAYE and KiwiSaver.
All employees must be allowed to keep 60% of their net pay, after PAYE (but not the earners' levy) and child support is deducted. This is the protected net earnings, to cover their living expenses. iPayroll will calculate this each pay and it would only be amended if your employee has reduced hours i.e. Leave Without Pay. iPayroll reports the deductions to IRD as part of the payday filing.
In the Payday that you have been instructed to begin deductions, you will need to add this to their Timesheet Template as a permanent deduction.
For more information here
Child Support Arrears %
For more information here ird Protected Net Earnings
For more information here ir335 Employer's Guide search for Protected Net Earnings
For more information here Upload a Document to Person
To edit a Timesheet Template
- People > View People
- Select the Employee's name.
- In the Timesheet Template
- Enter 1 in the Green Qty box.
- Select > CSD - Child Support Deduction from the drop down menu
- Enter the amount to deduct each pay in the Rate box
- + Add
- When you open the pay, the deduction will be taken
- Upload a copy of the deduction notice
- People > View People
- Select the Employee's name.
- Personal Details > Documents
If you already have a pay open
select deduct now to activate the deduction on the current timesheet.
Sample Child Support Deduction Notice
Example of Protected Net Earnings Calculation (which is different to their take home pay)
Weekly Gross Pay $ 1250.00
Minus Total PAYE including ACC Earners' levy - $ 259.01 (Tax Code M - tax tables 01 April 2022)
Plus ACC Earners' levy + $ 18.25 ($1250 x 1.46%)
Equals Net Earnings = $ 1009.24 (Maximum child support that could be deducted is 40% of this amount, $403.69)
Any other deductions are excluded from this calculation
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