Is your system compliant with the latest changes effective 1st April?

Update on ESCT rates – new thresholds

Following on from the change in tax thresholds that came into effect on 31 July 2024, there is a further change to the tax thresholds for ESCT rates for employers’ Kiwisaver contributions as at 1st April. It is always recommended to review ESCT rates once a year after 1 April, but this is more important this year due to the tax threshold changes.

Action: Does your payroll system have a method for determining the ESCT rate for employees and what is the process?

Taxation of extra pay when employment ends

From 1 April new rules will be in place for extra pay on termination. The annualised amount will now be based on the PAYE income for the last two paid pay periods prior to the termination pay. If an employee is weekly paid, then the annualised amount will be calculated on the last two paid weeks times by 26 to get the annual income. Fortnightly paid will be based on the last two fortnights pay periods times by 13 and monthly paid will be based on the last two monthly pays times by 6 to get the annual income. The last two pay periods are the periods on which the employee received regular payments and excludes out of cycle payments made in between. The calculation also excludes any extra pay made in the regular pay period.

Action: Has the software provider updated the system to accommodate this new taxation rule?

1 April Min wage change

On 1 April 2025, the minimum wage will increase from $23.15 to $23.50, an increase of 35c. While this year’s increase is less than in previous years, it’s important to check employees’ rates and increase where the minimum wage is applicable. Be careful of the calculation of piece work where the average rate may fall below $23.50.

Action: Review and update any pay rates for employees on minimum wage. As this is legislated, there is no requirement to notify the employee although it is best practice.

ACC earner levy

Apart from a period from 1 April 2020 to 31 March 2022, ACC levies increase each year. ACC levies are included in the employees’ tax take each pay run and is not easily identified as the tax take is one amount encompassing both the PAYE and Earner’s Levy. This year the ACC levy is increasing from $1.60 per $100to $1.67 per $100. While the increase is small, there are some employees who notice the increase in tax and thus the reduction in net pay and may query it so it pays to have this in mind when processing the first pay run paid after 1 April.

Action: Review any release notes from software provider and spot check a few employees in the first pay run paid in April to ensure this has been updated.

Is your system compliant with the latest changes effective 1st April?

Update on ESCT rates – new thresholds

Following on from the change in tax thresholds that came into effect on 31 July 2024, there is a further change to the tax thresholds for ESCT rates for employers’ Kiwisaver contributions as at 1st April. It is always recommended to review ESCT rates once a year after 1 April, but this is more important this year due to the tax threshold changes.

Action: Does your payroll system have a method for determining the ESCT rate for employees and what is the process?

Taxation of extra pay when employment ends

From 1 April new rules will be in place for extra pay on termination. The annualised amount will now be based on the PAYE income for the last two paid pay periods prior to the termination pay. If an employee is weekly paid, then the annualised amount will be calculated on the last two paid weeks times by 26 to get the annual income. Fortnightly paid will be based on the last two fortnights pay periods times by 13 and monthly paid will be based on the last two monthly pays times by 6 to get the annual income. The last two pay periods are the periods on which the employee received regular payments and excludes out of cycle payments made in between. The calculation also excludes any extra pay made in the regular pay period.

Action: Has the software provider updated the system to accommodate this new taxation rule?

1 April Min wage change

On 1 April 2025, the minimum wage will increase from $23.15 to $23.50, an increase of 35c. While this year’s increase is less than in previous years, it’s important to check employees’ rates and increase where the minimum wage is applicable. Be careful of the calculation of piece work where the average rate may fall below $23.50.

Action: Review and update any pay rates for employees on minimum wage. As this is legislated, there is no requirement to notify the employee although it is best practice.

ACC earner levy

Apart from a period from 1 April 2020 to 31 March 2022, ACC levies increase each year. ACC levies are included in the employees’ tax take each pay run and is not easily identified as the tax take is one amount encompassing both the PAYE and Earner’s Levy. This year the ACC levy is increasing from $1.60 per $100to $1.67 per $100. While the increase is small, there are some employees who notice the increase in tax and thus the reduction in net pay and may query it so it pays to have this in mind when processing the first pay run paid after 1 April.

Action: Review any release notes from software provider and spot check a few employees in the first pay run paid in April to ensure this has been updated.

Now, we shift from planning to execution. Provisioning, Build, and Vendor Testing is where your system begins to take shape. This stage brings together infrastructure, customisation, and early-stage quality assurance – all before the system reaches your wider team. Each element plays a vital role in ensuring the foundations are strong, the build is aligned with expectations, and the finished product delivers real value.

Provisioning: Laying the Technical Foundation

Provisioning is the behind-the-scenes work that prepares your environment for what’s ahead. It begins with setting up the right infrastructure – development, testing, and production environments that reflect the operational realities of your organisation.

At the same time, access management comes into play. This means configuring user roles and permissions in a way that supports both usability and data security. It’s about giving the right people the right access at the right time.

Finally, this is when you prepare for integration. Most organisations rely on a network of systems – payroll, finance, timekeeping, and more. Getting these interfaces ready is crucial so your HCM system doesn’t operate in a silo but works in harmony with your existing stack.

Taken together, these actions ensure that the project’s next phase – the system build – has a stable and secure foundation.

• Environment Setup: Establishing development, testing, and production environments that mirror your organisation’s operational landscape.
• Access Management: Configuring user roles and permissions to ensure secure and appropriate access to the system.
• Integration Points: Preparing interfaces for seamless data exchange between the HCM system and existing applications such as payroll, finance, and timekeeping systems.

Build: Developing the Customised Solution

Once the infrastructure is in place, the build phase can begin. This is where the vendor takes the detailed requirements you’ve aligned on during the design stage and starts developing a tailored system.

Configuration is about fine-tuning system settings to support your organisational structure, policies, and compliance needs. Customisation goes a step further – introducing bespoke workflows or features that reflect the way your business operates. It’s also where data preparation begins in earnest. Migrating from legacy systems is never as simple as a copy-paste job. It requires careful mapping and cleansing to ensure that what goes into the new system is accurate, usable, and aligned with your goals.

Close communication is essential here. Every adjustment, every iteration – it all contributes to how the system will ultimately feel for your people. Keeping that dialogue open ensures the build doesn’t drift away from what your organisation actually needs.

• Configuration: Tailoring system settings to align with organisational policies, workflows, and compliance requirements.
• Customisation: Developing bespoke features or modifications to address unique business processes or needs.
• Data Migration Preparation: Mapping and cleansing data to ensure accurate and efficient migration from legacy systems.

Vendor Testing: Ensuring Quality and Compliance

Before your internal team gets hands-on with the system, the vendor needs to run their own tests. This isn’t just about ticking boxes – it’s about confirming that the build meets expectations and can handle real-world use cases.

Vendor testing includes individual unit testing, broader functional testing, and making sure integrations work as expected. But testing isn’t something that happens in a vacuum. Your project team should be involved through regular playback sessions. These checkpoints provide an opportunity to preview completed features, validate progress, and resolve issues before they become roadblocks.

• Unit Testing: Assessing individual components or modules for correct operation.
• Functional Testing: Verifying that the system’s features work as intended and meet the specified requirements.
• Integration Testing: Ensuring that the system interfaces correctly with other applications and data flows seamlessly across platforms.

These collaborative reviews are where value is created – not just in terms of system functionality, but also team alignment and user confidence.

Best Practices to Navigate This Phase

If there’s one theme that runs through this phase, it’s alignment – between your team and the vendor, between expectations and outcomes. That’s why clear communication, structured documentation, and the right resource allocation can make all the difference.

Even with the best planning, challenges can arise. Having contingency strategies in place allows you to stay flexible and focused, even when things don’t go exactly to plan. This phase isn’t just about building software – it’s about building trust in the solution you’re about to roll out.

• Maintain Open Communication: Establish regular check-ins and clear channels for feedback between your team and the vendor.
• Document Changes and Decisions: Keep detailed records of configurations, customisations, and any alterations to the original design.
• Allocate Adequate Resources: Ensure that both your organisation and the vendor have the necessary personnel and tools dedicated to the project.
• Plan for Contingencies: Anticipate potential challenges and develop mitigation strategies to address them proactively.

By adhering to these practices, organisations can navigate the complexities of the provisioning, build, and vendor testing phase effectively, setting the stage for successful user acceptance testing and system deployment.​

Stay tuned for the next instalment in our series, where we will delve into User Acceptance Testing, Training, and preparing for Go-Live.​ 

Need expert support through your HCM implementation journey? From provisioning and build to deployment and beyond, Alxemy’s Software Implementation Services give you the experience, structure, and guidance to get it right. Let’s talk about your next step.

Winning the 2Degrees Business Award (South and East Auckland)

The New Year often invites us to look forward, but it also provides a moment to reflect on past milestones. For Alxemy, one of the highlights of 2024 was being recognised as the Best Emerging Business at the 2Degrees Business Awards (South and East Auckland), held on 4th December at the Cordis Hotel.

An Unforgettable Night

None of us had attended an awards ceremony before, so we didn’t quite know what to expect. As the first category of the evening, Best Emerging Business, was announced, our team sat nervously, uncertain of what was ahead. Then, when Alxemy was declared the winner, it felt like a scene from the Academy Awards! Cameras swarmed our table as we sat in astonishment, and it took us a moment to collect ourselves and head to the stage.

The journey to that moment wasn’t easy. Hilde Marais, our HR Manager, was the driving force behind our decision to enter. It took significant effort to gather and submit our entry, and being named a finalist was a surprise in itself. The Gala Dinner was a bright moment in what had been a challenging year, and the night highlighted the resilience and tenacity of businesses in our region.

Celebrating Resilience

With over 41 finalists across various categories, the event was a celebration of perseverance in business. As the organisers noted, “The winners and finalists were not just exceptional in their respective industries, but they were also shining examples of what it takes to succeed in the highly competitive business landscape.”

Looking Ahead

With this incredible win behind us, the team at Alxemy is now preparing for the Auckland-wide Best of the Best Business Awards on April 11, 2025, where the top businesses from all regional categories will compete.

Stephan Blumenberg, Founding  Director of Alxemy, reflected on the journey: “Winning the 2Degrees Best Emerging Business Award is a testament to the hard work, creativity, and dedication of our team. It’s a proud moment for Alxemy and motivates us to aim even higher in 2025 as we continue to support our clients and grow our impact.”

Stay tuned—2025 is shaping up to be an exciting year for Alxemy!

1. Payroll is always the last to know

When recruitment, HR and payroll sit in different departments, or the locations are remote and in a different office, lines of communication can be fractured, and payroll is not aware of the new hire until the employee asks why they haven’t been paid.

With recruitment, HR records, and payroll in one system, when the recruitment manager hits the HIRE button in the recruitment module, the new employees’ details are added to the HR record in Dayforce and a notification of the new hire is sent to all departments that need to know, such as payroll, IT and the employee’s manager.

2. Global Locations

As is often the case with New Zealand companies, especially multinationals, the head office is in another country, and in some cases, the employees’ reporting manager is also in another region. 

Dayforce is a truly global system meaning that an employee in New Zealand can be managed by a manager in another country. An employee can even have more than one manager, perhaps one based in the location in which they work and one based offshore. These management assignments can also be swapped out if reporting lines change.

3. Smart Onboarding

Nothing is more welcoming to a new employee than a robust onboarding experience but this is an area that often gets neglected and a new employee arrives when no one is expecting them, there is no place for them to work, and no buddy to tell them where things are and what they will be doing.

Dayforce has an onboarding module that can be configured to suit the role as well as the location.  And it introduces a new employee to their buddy who will be their go-to in the first few days of employment.  Onboarding can also provide a guided introduction to the company including employment forms and policy documents all in one place.

4. Multiple Roles

Some HR and payroll systems can’t handle employees who work in more than one role in more than one department/location. Dayforce has the ability to assign employees to multiple roles in multiple locations at different pay rates.

5. Continuous Payroll

Most payroll cycles have a definitive start period, usually after the pay period has ended. For example, the pay period ends on Sunday and the pay is due on Tuesday.  Payroll can’t start processing payroll until Monday which results in a large volume of work in a short space of time.

Dayforce payroll can be initiated at any time in the pay cycle and can even be initiated in advance. Continuous payroll means that payroll personnel have the time to amend pay calculations and check the result in real time well ahead of the pay run deadline. This creates efficiency and accuracy in the scheduled pay run resulting in fewer out of cycle pay runs.

6. Messaging

Communications with employees can be a hit or miss affair with conventional methods such as a companywide email to a wide audience that could end up in junk/spam inboxes and not be read or is irrelevant to a certain group of employees. Dayforce includes an integrated messaging system that functions like an email inbox, allowing messages to be customized for specific groups of recipients—such as employees in a particular location, department, pay group, or role.

Employees can also use the Message Centre to communicate with one another, providing a messaging option for those without a dedicated inbox. This is especially useful for casual or fixed-term employees, as it allows them to send and receive messages without the need for a company email account.

7. Hard coded platform that doesn’t allow for customisable features

It is quite common for an HR/payroll system to be inflexible to the company’s requirements and only large-scale corporations can invest in requiring the vendor to create a system that meets their needs.  Smaller companies must deal with the system provided and initiate workarounds. 

The Dayforce system is configurable to the company’s individual requirements as part of the implementation process ensuring that the system meets the specific needs of that company.

8. Multiple systems across multiple platforms that creates errors and inefficiencies

With recruitment in one system, HR in another, time and attendance in another, payroll in another and performance in yet another, it is no wonder data goes missing, is misinterpreted and fails to align. Susan can be Sue on one system and Susie in another.

Dayforce is a fully integrated system for the whole of the life cycle of an employee from recruitment to termination and everything in between. No need to integrate data from one system to the next and losing information along the way.  And goodbye to receiving the dreaded ‘import failed’ message when data doesn’t align.

9. Mobile App

How often have you heard from an employee; I can’t complete my leave request because I don’t have access to my computer? Or I didn’t know I was working that shift?

This is where the Dayforce mobile app comes in. Available in iOS and Android, the app can be used for anything that an employee can do in the browser – apply for leave, check their shifts, message colleagues and even view their payslip. For the Manager, they can approve leave, send notifications and announce available shifts to their team.

10. And last but not least – compliant with New Zealand Holidays Act

Many payroll/time and attendance systems are not compliant with the New Zealand Holidays Act, even systems that are New Zealand based.

Dayforce comes with an out of the box New Zealand Holidays Act configuration that has annual leave in weeks and circumstantial leave, commonly known as FBAPS leave, in days. Dayforce also calculates the OWP/AWE rates for annual leave as well as RDP/ADP rates for circumstantial leave making it compliant with New Zealand legislation.

Payroll processing can’t wait for managers on extended leave to return for approvals. Before your management team heads off on their break, confirm that all necessary payroll approvals are completed or that alternate arrangements are in place.

This avoids bottlenecks and last-minute delays that could impact the timely distribution of payroll, particularly if approvals are needed from multiple departments. As we approach the holiday season, it’s essential for businesses to ensure payroll processes continue smoothly. Whether your business closes or operates through the holiday period, payroll must remain seamless.

Employees still need—and expect—to be paid on time. However, managing payroll over this period can bring specific challenges. Here are ten key considerations for ensuring a smooth payroll operation during the holidays:

1. Confirm Your Closedown Period

If your business has a closedown period, notifying employees in advance is essential. Legally, employees must be informed at least 14 days before a shutdown, but giving earlier notice helps them plan and manage their time off better.

Informing your team well ahead ensures they’re fully prepared and reduces last-minute disruptions to your payroll planning. It also allows employees to clarify any questions about how leave will be handled during the closedown period.

2. Clarify Annual Leave Requirements

If employees are required to take annual leave during the closedown, communicate this clearly, including what happens if they don’t have enough leave available.

Remember, employees are still entitled to paid Public Holidays that fall within their annual leave (as per Section 40 of the Holidays Act 2003). Encouraging employees to plan their leave carefully now will help them avoid surprises and ensure they’re paid appropriately. Early conversations with employees about these details can help smooth any confusion and set clear expectations.

3. Plan for Pay Dates Over Public Holidays

If a Public Holiday lands on a normal pay date, you may need to adjust payroll processing to ensure funds reach employees on time. Although some banks process transactions on Public Holidays, it’s not always reliable.

Adjusting payroll to process earlier, if needed, ensures employees are paid on the expected date, avoiding complications with automatic payments or direct debits. This extra measure reassures employees, keeps trust intact, and prevents any potential holiday-season stress around late payments.

4. Communicate Any Changes to Pay Dates

If payroll dates need to shift due to holiday timing, communicate this to employees well in advance. Employees rely on their wages to arrive on specific dates, so it’s courteous—and practical—to inform them of any changes as soon as possible.

By being proactive with this communication, you’ll avoid a flood of enquiries from staff seeking clarity during an already busy period for your payroll team.

5. Ensure Payroll Approvals Are Handled Before the Holidays

Payroll processing can’t wait for managers on extended leave to return for approvals. Before your management team heads off on their break, confirm that all necessary payroll approvals are completed or that alternate arrangements are in place.

This avoids bottlenecks and last-minute delays that could impact the timely distribution of payroll, particularly if approvals are needed from multiple departments.

6. Check Bank File Approver Availability

Payroll depends on bank file approvers to release payments, so it’s crucial to confirm they’re available during the scheduled payroll period. If pay dates are altered, approvers need to know about these changes to be available on the new dates.

Ensuring they’re prepared and available to approve files on time prevents delays in payroll processing, so employees receive their wages as expected, even during the holidays.

7. Verify Employee Leave Entries Are Up to Date

If your business has a closedown period, check that leave requests have been entered and approved for all affected employees. If there’s no closedown, confirm that leave entries for those taking holiday leave are accurate and complete.

This prevents any last-minute requests that could lead to errors or missing information in payroll processing, keeping everything on schedule. For businesses with high demand during the holiday season, ensure blackout periods are clearly communicated to employees well in advance.

8. Coordinate Operational Coverage and Leave Schedules

During busy holiday periods, coordinating who’s available to work is critical. If multiple staff want the same time off, consider setting a policy—such as rotating holidays or giving preference to employees who didn’t take leave the previous year.

Clear policies about holiday leave expectations create a fair system for everyone and help ensure you have the staff needed to maintain operations. If you require coverage on key days, set these expectations early to avoid disappointment and ensure smooth operations.

9. Prepare for Increased Payroll Workload

Holiday payroll management often brings an increased workload due to Public Holidays, additional annual leave processing, and potential employee turnover. If the holiday season is also your offboarding period, you may face additional pressure calculating termination payments.

Be sure you have enough resources in place to manage this demand. If your payroll team is stretched, consider bringing in temporary support to manage the extra load, so your team doesn’t feel overwhelmed and processing remains smooth.

10. Plan for Payroll Administrator Leave

If your payroll administrator is taking leave, it’s vital to ensure backup support is ready to step in. Payroll is time-sensitive and can’t be delayed, even over the holiday period.

Ensuring adequate coverage for payroll during this period gives your payroll administrator the well-deserved break they need while keeping payroll operations steady. Consider cross-training additional team members if possible, so they’re prepared to manage any payroll-related issues that might arise.

A Leader in Food Retail, Ready for Growth

Restaurant Brands New Zealand is a leader in the multi-site quick service restaurant industry, operating iconic brands such as KFC, Pizza Hut, Taco Bell, and Carl’s Jr. 

With a strong local presence Restaurant Brands is focused on delivering exceptional customer experiences and staying ahead of operational challenges as they expand.

Scaling Complexity and the Need for Expert Project Management

As their operations grew, Restaurant Brands faced  complex programs and projects. The first was the implementation of a new Customer Satisfaction Survey for KFC New Zealand, driven by KFC’s Global Head Office. This program required the management of multiple stakeholders, including vendors, consultants, and internal teams, to ensure seamless execution.

The second was a Technology Unification Project, spanning four different geographic regions. This project involved developing unified technology policies that complied with local regulations and aligned with Restaurant Brands’ operational goals. Both projects demanded precise project management and a partner capable of integrating with their internal teams.

“We knew we needed a partner who could manage the complexity and become an extension of our own team,” said the Restaurant Brands Program Sponsor/CIO. “That’s where Alxemy came in.”

Why Alxemy Was the Perfect Fit

Restaurant Brands sought a project management partner with both technical expertise and the ability to seamlessly integrate with their team and culture. After careful consideration, they selected Alxemy. With a proven track record of handling complex, multi-region projects, and a reputation for flexibility and adaptability, Alxemy was the clear choice.

“KFC Global needed assurance that this project would be handled with care and precision, and it was clear that their leadership and experience were exactly what we needed,” shared the KFC Global Project Sponsor.

Restaurant Brands Program Sponsor/CIOManaging Complexity with Precision

Alxemy took the reins of both projects with their hallmark precision and tailored project management approach. For the Customer Satisfaction Survey, Cel Medes, Director of Operations and PMO at Alxemy, led the project from start to finish. Her focus was on coordinating the many moving parts—vendors, internal teams, and external consultants—ensuring smooth communication and alignment.

“Every project comes with its own set of challenges, but this one required a deep understanding of both technical systems and stakeholder management,” Cel explained. “We worked closely with the business leads to ensure that testing and system integration went smoothly, and that the project stayed on track.”

On the Technology Unification Project, Tariro Sibanda, Project Service Delivery Manager at Alxemy, stepped up to lead the initiative. This project required managing teams across four regions with different time zones, local regulations, and operational requirements.

“One of the biggest challenges was aligning technology policies that complied with varying local laws while ensuring they were operationally efficient for Restaurant Brands,” Tariro said. “Managing a geographically dispersed team added another layer of complexity, but with the right planning and communication, we were able to keep everyone on the same page.”

Alxemy’s collaborative approach helped simplify the complexities, ensuring seamless execution and delivery within the agreed timelines and budgets.

Seamless Execution and Tangible Outcomes

Both projects were delivered on time, within budget, and with remarkable success. The Customer Satisfaction Survey provided valuable insights to KFC New Zealand, shaping their customer engagement strategies moving forward.

The Technology Unification Project allowed Restaurant Brands to standardise their operations across multiple regions, making their infrastructure more scalable and compliant with local legislation.

“KFC Global praised Alxemy’s ability to integrate with our team and lead with both heart and strategy,” said the Global Project Sponsor. “Cel didn’t just manage the project—she became an integral part of our team.”

Tariro’s leadership in the Technology Unification Project was equally impactful. “Thanks to Tariro, we navigated the complexity of working across time zones and local regulations with ease,” said Restaurant Brand’s Program Sponsor/CIO. “Alxemy’s ability to adapt to our culture and their strategic oversight made all the difference in delivering this project successfully.”

Alxemy—A Partner in Growth and Success

Alxemy’s role in supporting Restaurant Brands through these complex initiatives has solidified their position as a trusted partner. With their ability to integrate seamlessly into existing teams, manage complexity with precision, and deliver impactful results, Alxemy is more than just a project management service—they are an essential component of Restaurant Brands’ continued success.

“We see Alxemy as more than just a partner; they’re part of our team, driving our business forward,” said Restaurant Brand’s Program Sponsor/CIO. “Their commitment to our success is unmatched.”