Payroll in New Zealand 2026: PAYE, KiwiSaver and ACC levy

In New Zealand the employer deducts PAYE, which includes the ACC earners' levy, plus KiwiSaver and student loan deductions from each pay. It files the details with Inland Revenue every payday and pays them by the 20th of the following month. On top of salary it pays at least 3.5% KiwiSaver, less ESCT, and ACC's work levies.

New Zealand payroll at a glance

ACC levies and KiwiSaver contributions

New Zealand has no social-security contributions in the usual sense. Accident cover is funded by ACC levies, and retirement saving runs through KiwiSaver, which most new employees join automatically.

ACC earners' levy. The rate for the tax year ending 31 March 2027 is 1.75% ($1.75 per $100), up from 1 April 2026, on earnings up to $156,641. It is built into PAYE, so the tax tables and the PAYE calculator already include it.

KiwiSaver. Enrol eligible new employees automatically and give them the KiwiSaver information pack. Employees choose a rate of 3.5%, 4%, 6%, 8% or 10% of gross pay on the KS2 form; without one, deduct the default 3.5%. The default employee and employer rate rose from 3% to 3.5% on 1 April 2026 and is due to rise to 4% from 1 April 2028. An employee can apply to Inland Revenue for a temporary rate reduction to 3% for 3 to 12 months, and while it applies you may also lower your contribution to 3%.

Compulsory employer contributions of at least 3.5% are paid on top of the salary, and the employee's take-home pay should not be lower because of them. ESCT is deducted from your contribution before it goes to the fund, at a rate set at the start of each tax year (1 April):

For a new employee you estimate the total for the current tax year.

ACC work levies. Employers pay the work levy, based on the risk of injury in their industry, their claims history and their payroll, and the Working Safer levy collected for WorkSafe. ACC invoices them using the payroll information Inland Revenue receives.

PAYE and income tax on salaries

Every employee completes a tax code declaration (IR330). The main job uses code M, or ME for employees eligible for the independent earner tax credit (annual income between $24,000 and $70,000), which reduces PAYE. A second job uses a secondary code (SB, S, SH, ST or SA), and a student loan adds SL to the code. Without a completed declaration you must deduct at the non-notified rate of 46.75%, including the ACC earners' levy.

Income tax rates (in force for full tax years since 1 April 2025):

There is no tax-free threshold: the first dollar is taxed at 10.5%. The thresholds were raised part-way through the 2024–25 tax year, which is why that year used composite rates.

PAYE tables and calculator. Inland Revenue's tables (IR340 for weekly and fortnightly pays, IR341 for four-weekly and monthly pays) and its online PAYE calculator give, for each amount of pay, the PAYE including the ACC earners' levy, student loan, KiwiSaver, employer contributions and ESCT. The tables cannot be used in some cases, such as lump sums, tailored tax codes or holiday pay paid as a lump sum.

Student loan deductions. For a main-job SL code, deduct 12% of gross pay above the pay-period threshold: $464 a week or $2,010.66 a month in the 2027 tax year ($24,128 a year). On secondary income the 12% applies from the first dollar.

Minimum wage, holidays and leave

Minimum wage from 1 April 2026 (before tax):

The government reviews the rates every year. Employees aged 16 and over must be paid at least the applicable minimum wage.

Minimum rights: every employee must have a written employment agreement, gets 4 weeks of paid annual holidays at the end of each year of employment, has public holidays off on pay when they would normally work those days, and is entitled to 10 paid sick days after 6 months of employment. Holiday pay is taxed through PAYE in the period you pay it.

New Zealand has no 13th salary or statutory bonus.

Payroll calendar, payday filing and records

Before the first pay: register as an employer with Inland Revenue in myIR (or with form IR334). For each new employee, collect the IR330, the KiwiSaver deduction form (KS2), and give Inland Revenue their KiwiSaver details before the first payday or with the first employment information return.

Payday filing: every time you pay employees you file an employment information return with gross earnings, PAYE and other deductions, KiwiSaver employer contributions and ESCT.

Paying deductions:

A due date on a weekend or public holiday moves to the next working day. Late payment triggers an initial 1% penalty the day after the due date, a further 4% if the amount is still unpaid 7 days later, and interest.

Records: keep all employment and wage records, including IR330 and KiwiSaver forms, for at least 7 years, in English or Māori. You must also keep accurate records of time worked, payments, and holiday and leave entitlements.

Worked example: $6,000 a month in 2026–27

An employee earns $6,000.00 a month ($72,000 a year) in their main job, uses tax code M, has no student loan and contributes 3.5% to KiwiSaver. The employer contributes 3.5%. Salary plus employer contributions come to $74,520 a year, so the ESCT rate is 30%.

Income tax on $72,000 is 10.5% × $15,600 = $1,638.00, plus 17.5% × $37,900 = $6,632.50, plus 30% × $18,500 = $5,550.00: $13,820.50 a year, or $1,151.71 a month. The ACC earners' levy is 1.75% × $6,000 = $105.00. The IR341 monthly table gives $1,256.66 of PAYE for $6,000 under code M; the few cents' difference comes from the way the tables round.

ESCT is paid to Inland Revenue with the other deductions, so it reduces what reaches the scheme, not what the employer spends. ACC's work levy and Working Safer levy are invoiced separately and are not included.

Common mistakes

1. 1Deducting KiwiSaver at 3% after 1 April 2026 without a temporary rate reduction notice from Inland Revenue.
2. 2Taking the employer contribution out of the employee's pay, or paying it gross without deducting ESCT.
3. 3Filing employment information late. Electronic filers have 2 working days from each payday.
4. 4Using the non-notified rate by default instead of asking for the IR330 on the first day, or the wrong code for a second job.
5. 5Missing the switch to twice-monthly payments after annual PAYE and ESCT reach $500,000.
6. 6Paying below the new minimum wage after 1 April, when the rates change every year.

For a smooth month-end, see our month-end close checklist.

How Clientlly helps

Clientlly ships a built-in payroll profile for New Zealand: the 2026–27 PAYE bands, the 1.75% ACC earners' levy with its earnings ceiling, KiwiSaver employee and employer rates, and the adult minimum wage, checked against official sources on 1 October 2026. It calculates gross to net and the employer contributions, produces payslips, supports recurring payroll adjustments, and imports employees and payroll data; an administrator can adjust the rates in the payroll tax settings. The profile models one employee in a primary job, single, without dependants, at national level, so tax codes, ESCT, student loans, the independent earner tax credit and personal circumstances must be checked against Inland Revenue's tables.

The Clientlly HR module also handles leave requests and approvals with a leave calendar and keeps HR documents in one place, and attendance and time tracking records hours and overtime for you to review before payroll.