P.A.Y.E.

Press, Volume XCVII, Issue 28542, 22 March 1958, Page 3

P.A.Y.E.

Sir,—Under the PA.Y.E. system it will be advisable for wageearners’ wives who do casual or seasonal work to be careful regarding their earning allowance of £125. For example- a man with two children, having the code number M2, earning £l2 a week, and whose wife earns no more than £125 per annum, will pay a tax of 15s a week. However, if his wife expected to earn, say, £126 per annum, his code number would be S2, and he would pay a tax of 19s Id a week, which, quite evidently, would be a case of penny wise and pound foolish. This could affect the income of a farm worker whose wife helps with domestic duties or who cooks for single men. This prompts the question: where a farm housewife cooks and provides meals for single men and casual workers, what part of-her gross income, under P.A.Y.E., is assessable for income tax?—Yours, etc., D. ROBERTSON. Rakaia, March 17, 1958. [The District Commissioner of Taxes (Mr N. A. Rowntree) replies: “A married man who anticipates that his wife’s earnings will exceed £125 for the coming year, must show ‘S’ in the top square of his tax code declaration. If, at the end of the income year, it is found that his wife’s earnings did not exceed £125, or her income was between £125 and £250, application should be made to the department by the husband to obtain the necessary adjustment in his favour. The correspondent has not given any indication of the arrangement entered into between the farm worker’s wife and the farmer regarding payment for the supply of meals to farm workers. Each case of this description is considered on the relevant circumstances. Until these are known the method of payment of tax under P.A.Y.E: cannot be determined. It is suggested, therefore, that the correspondent contact the department as soon as possible so that a decision may be given.”!