Wage Tax Levy Has its Pitfalls.

Star (Christchurch), Volume XLIV, Issue 188, 10 August 1931, Page 6

Wage Tax Levy Has its Pitfalls .

July Earnings not Liable for Taxing.

POINTS OF NEW INTEREST are still being found in regard to the Emergency Unemployment Levy, which was deducted for the first time in the case of most wageearners on Friday.

In the first place, although instances have been mentioned of wages paid last Saturday week having the levy deducted, there is no ambiguity on this point, in that the levy can be calculated only on wages or salaries earned on and after the first day of August. Even if payment for work completed before the end of July is delayed for some time, it is still not liable for the levy and may be paid in full. Many awards contain provision for tea money to be paid when employees are expected to work at night without being given adequate warning, and in such cases, as well as the provision for “ dirt money ” bonuses and similar payments, the levy must be calculated on the wages plus all such payments. On the other hand, where deductions are made for National Provident, superannuation or sick benefit funds, the levy has to be calculated on the amount of wages before any such deductions are made.

There is a provision in the Act particularly affecting employers, for the amount of the levy, whether paid in cash or by the purchase of stamps, must be in the hands of the local Post Office officials not later than the day on which the wages are to be paid, and the penalty for infringement ol this regulation is a fine of twenty pounds. It should be noted that there is no age limit to the collection of the emergency levy, and every person in receipt of income by way of wages or salary must contribute. No alteration has been made in the method of collection of the quarterly levy, the onus still being on the individual to pay the levy at the stated time, although an emplpyee may arrange for his employer to deduct the amount of the levy from his salary or wages. When the amount of the Emergency Levy totals more than £5, it may be paid to a Money Order office, provided it is accompanied by a certificate showing the gross amount of the wages due and the total of the tax to be paid, and signed by two responsible officers of the firm or company on which a receipt will be given which must be pasted in the wages book. Where individual receipts are not obtained and stamps for the total amount of the levy are the wages book, these stamps must be cancelled by two employees of the firm.

Taking the basic wage'for skilled workers at 2s lid per hour, or £4 13s 6d per week of forty-four hours, the amount of levy amounts to Is 3d a week, and assuming that fifty weeks are worked in the year the total amount payable, plus the general levy, is £4 2s 6d a year, and the recipient of this wage is still below the new minimum for income tax collection.