You may be required to deduct Child Support Payments from an employee as directed by the IRD. PayHero includes a default Child Support pay item for making these deductions. The IRD's bank account details are included on the default pay item, enabling easy payment through Bank Batch Files.
To add Child Support deductions to an employee simply view the employee's Default Pay tab under Manage > Employees and add the Child Support pay item to the Deductions area.
Once added, specify the amount to be deducted from each pay in the Rate field.
Payment to a Third Party / Percentage Payments
If the child support payment is to be made to a recipient other than the IRD, or the amount deducted is based on a percentage, a custom 'Third Party Deduction' Pay Item will be required.
Once the pay item is setup it can be added to the Deductions area of the employee's Default Pay.
A guide showing how to create new Third Party Deductions can be found in our Pay Items - Deductions support article.
Important: When creating a custom Deduction pay item, using the Recipient Name 'Inland Revenue' will cause any amounts associated with the Pay Item to be included in Bank Batch File payments to Inland Revenue. In order to process these separately use a recipient name of 'IRD'.
Protected Net Earnings
An employee is entitled to keep 60% of their net pay after child support is deducted, referred to as 'Protected Net Earnings'. The maximum child support payment is 40% of the employee's net pay. Additional information on the rules and regulations for child support payments can be found on the IRD Website.
The maximum deduction threshold will be automatically applied by PayHero.