NZ PAYE Calculator 2025-26

PAYE stands for Pay As You Earn. It's the income tax (and student loan, if applicable) your employer withholds from each pay and forwards to Inland Revenue (IRD) on your behalf.

PAYE is the mechanism by which income tax is collected from salary and wage earners. It includes income tax and the ACC earner's levy, and may also include student loan repayments if your tax code ends in 'SL'. KiwiSaver is deducted alongside PAYE but is separate.

If your gross pay varies (overtime, bonuses, irregular hours), the PAYE withheld will vary too. PAYE is calculated by annualising your current pay period's gross, applying the progressive brackets, then dividing back. So a higher pay period pushes more income into a higher bracket for that period.

Bonuses use 'extra pay' rules with their own withholding rates based on your annualised income. We have a dedicated bonus tax calculator that handles this. See IRD extra pay guidance.

Your second job uses a secondary tax code (SB, S, SH, ST, or SA — plus 'SL' if you have a student loan). Pick the secondary code based on your TOTAL income from both jobs. The flat rate matches the marginal bracket your combined income falls into. See IRD tax codes.

Enter your gross pay per period and your tax code into this calculator. The PAYE figure should match your payslip within a dollar or two. If it's more than a few dollars off, raise it with your payroll team — they may have your code wrong.

You'll either over- or under-pay tax during the year. IRD performs an automatic income tax assessment after 31 March each year. Overpayment → refund; underpayment → bill. Using the right code from day one avoids surprises.

No. KiwiSaver is a separate deduction your employer takes alongside PAYE. This calculator can include it as an optional add-on so you see your true take-home.

Yes — the ACC earner's levy (1.67% in 2025-26, capped at $152,790) is collected through PAYE alongside income tax. See ACC levy rates.

Your employer pays PAYE to IRD by the 20th of the month following the pay period (or twice monthly for larger employers). You don't need to do anything — it's automatic.

For 2025-26 the ACC earner's levy is 1.67% on income up to $152,790 per year (capped at ~$2,552 annually). Once your year-to-date earnings cross $152,790, ACC stops being deducted and your net pay increases by 1.67% for the rest of the income year. The cap resets on 1 April each year. The levy goes to ACC for non-work injury cover — separate from income tax.

The Independent Earner Tax Credit (IETC) is $520/year for individuals earning between $24,000 and $48,000 annually with no Working for Families or main benefit. It's claimed automatically via the ME or ME SL tax code. The credit is delivered through PAYE — your employer withholds ~$10 less per fortnight. It phases out between $44,000 and $48,000 at $0.13 per dollar above $44k. Investment income and second-job income don't disqualify you — only WfF and main benefits do.

Bonuses use 'extra pay' rules: your employer annualises your last 4 weeks of regular pay, identifies which marginal bracket the bonus pushes you into, and withholds at that flat rate on the entire bonus. Rates are 10.5%/17.5%/30%/33%/39% by annualised income. A $5,000 bonus to a $80k earner withholds at 33% = $1,650, regardless of how the rest of the year plays out. Year-end IR3 reconciles. The 'bonus tax shock' you might feel comes from this flat-rate withholding, which is sometimes higher than the smoothed effective rate.

Year-end IR3 reconciles. The flat-rate secondary withholding usually over-withholds when combined income would have produced a lower effective rate via primary-bracket coverage. You get the over-withheld amount back as a refund. To avoid over-withholding during the year, ask IRD for a special tax code — they'll issue a customised rate that more accurately reflects your combined income's marginal rate.