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NZ Payroll - Option to create pre-tax deductions

The new NZ WorkRide scheme works via a pre-tax deduction re salary sacrifice. Xero Support confirmed that right now there’s no functionality in Xero Payroll to process a pre-tax deduction. We have been advised that we need to manually adjust the tax in the draft pay run to reduce the PAYE withheld. Please enable your customers to comply with the NZ WorkRide scheme without the need for manual PAYE adjustments, by creating the ability to process pre-tax deductions.

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Katherine Ward shared this idea  ·   ·  Report…  ·  Admin →
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  • Emily Riach commented  ·   ·  Report

    Agree 100% with Katherine's comment - we nee a feature to make Workride automatic and not have to set things up in a convoluted manner as a work around

  • Sheridan Jamieson commented  ·   ·  Report

    Is there any reason why the salary sacrifice cannot be entered as a negative earnings figure?

  • Forest Smith commented  ·   ·  Report

    We would like our staff the opportunity to use the new WorkRide scheme to purchase e-bikes and e-scooters. It is frustrating that the pre-tax deductions cannot be handled automatically by Xero.

    The WorkRide Scheme prides itself on being fully tax compliant, so Xero Payroll needs to address this urgently otherwise it is not providing tax compliant outcome for employers.

  • Karen Beadle commented  ·   ·  Report

    Definitely support this, I have a complex payroll that we are currently using Crystal payroll to do but I want to switch it to Xero Payroll but won't be able to if this is having to be done manually.

  • Megan Shefford commented  ·   ·  Report

    Support Katherine's idea to add the function to Xero Payroll to be able to process pre-tax deductions, while there is a solution available it is manual and exposes employers to having payroll errors.

  • Martin Etherington commented  ·   ·  Report

    Create a new Discretionary pay item called, for example, ' Salary Sacrifice - Bike Lease'. This would have a fixed amount as the rate type, and have an appropriate expense account. I recommend using a new ledger expense account to account for the funds salary sacrificed which would be offset by the cost of the bike ‘lease’.

    For each employee purchasing/leasing a bike this way, add this pay item to the employee's pay template. With a negative amount being the amount per pay to pay off the bike over 12 months. (Note that currently it is not possible to set a negative amount in the pay template, so manually enter the fixed amount as a negative each pay.)

  • Katherine Ward commented  ·   ·  Report

    The WorkRide Scheme prides itself on being fully tax compliant according to the scheme website, so Xero Payroll needs to address this urgently otherwise it is not providing tax compliant outcome for employers.

  • Barbara Wiley commented  ·   ·  Report

    We have offered our staff the opportunity to use the new WorkRide scheme to purchase e-bikes and e-scooters. It is frustrating that the pre-tax deductions cannot be handled automatically by Xero.

  • Zoe Palmer commented  ·   ·  Report

    it would be great if this was available in payroll, manual adjustments are prone to errors