HR Practice For Payroll Practitioners

HR Practice for Payroll Practitioners

Skill Check 2 - Redundancy

1. Is redundancy compensation a legislative requirement in NZ?

Yes / No

2. If an employee is made redundant, at the very least, what do they get?

(a) Notice period paid

(b) An extra week of annual holidays paid out

(c) Redundancy compensation based on how many years they have worked

(d) An opportunity to come back after 6 months to their old job

3. How did the decision for redundancy arrive? Select the statement that is legally correct.

(a) All other options need to be looked at before a redundancy can be justified as the only option available.

(b) The business can quickly decide that redundancy is the first course of action.

(c) It can be used to get rid of an employee that is causing workplace problems.

4. Is notice part of redundancy compensation?

Yes / No

5. How is redundancy compensation taxed, and is there anything special about this payment for payroll to apply?

(a) It is taxed as salary and wage and is a legislative requirement to be included in the 8% on termination for leave.

(b) Taxed as an extra pay at the flat tax rate as no earner levy is deducted and is not part of the 8% on termination.

(c) Taxed as extra pay with earner levy and included in the 8% for leave as a legislative requirement.

© New Zealand Payroll Practitioners Association, Sep 2024, Ver 12

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