PAYE Deductions on Salaries & Wages

IRD - 20 January 2012

Employers must deduct PAYE, including tax on schedular payments (formerly withholding payments) from payments made to staff or contractors. Deductions may also be needed for student loan repayments, child support, KiwiSaver, or any benefits, bonuses or other allowances that you pay. The amount of PAYE you deduct depends on your employee's tax code.

PAYE employees must complete a Tax code declaration (IR 330) as soon as they start working for you. If an employee fails to complete the tax code declaration, you must deduct PAYE at the no-declaration rate.

Every month you must file an employer monthly schedule detailing each worker's gross earnings and deductions.

If you are a small employer with gross annual PAYE deductions of less than $500,000, the schedule and payment are made on the 20th of the month following the deductions.

If you are a large employer with gross annual PAYE deductions of $500,000 or more, the deductions made from payments made to workers between the:

  • 1st and the 15th of the month are paid by the 20th of the same month.
  • 16th and the end of the month are paid by the 5th of the following month (except for December payment is to be made by 15 January). The employer monthly schedule is filed along with this payment.

For more information regarding PAYE deductions and assistance with any queries you may have, please contact us.

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All information is correct at the date of article publication. Please note we provide the information as a service only. Accordingly, the contents are not intended as a substitute for specific professional advice and should not be relied upon for that purpose.   

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