Inland Revenue has informed us that failing to pay PAYE deductions can have serious consequences, including up to 5 years in prison.
Employers in New Zealand are obligated to pay PAYE, as well as other amounts such as KiwiSaver or student loans. These are deducted from an employee’s salary or wages. These must then be paid to Inland Revenue by their due date. Making these deductions and failing to pay them to Inland Revenue on time can result in up to 5 years in prison.
Some important things to know are:
- An employer who deducts PAYE and related amounts from a salary or wages and, knowingly, applies the deductions for a purpose other than in payment to Inland Revenue commits a criminal offence.
- Any person who aids, abets, incites, or conspires with another person to commit this offence also commits a criminal offence.
This applies to situations where an employer takes PAYE deductions and fails to pay them to Inland Revenue, however, there are also criminal and civil penalties that can apply for employers who fail to deduct PAYE when required to do so.
Inland Revenue has made it clear that they will take action if your business collects PAYE deductions and fails to pay to Inland Revenue.
If you have questions about PAYE deductions, reach out to our expert tax team for advice.
