Employment Cost Calculator for New Zealand
Calculate your complete hiring costs for New Zealand employees, including payroll taxes, social security contributions, employee benefits, and management fees. This salary calculator provides accurate employer cost estimates for informed hiring decisions.
Employer Tax Contributions
| Tax Type | Rate | Base |
|---|---|---|
| PAYE (Pay As You Earn) | Varies (employee's tax code) | Employee's gross earnings |
| KiwiSaver Employer Contribution | 3% (minimum, increasing to 3.5% from April 2026 and 4% from April 2028) | Employee's gross salary or wages |
| ESCT (Employer Superannuation Contribution Tax) | Progressive rates (10.5% to 39%) | Employee's annual salary and wages + employer's gross KiwiSaver contribution |
| FBT (Fringe Benefit Tax) | 49.25% or 63.93% (single rate options) | Value of non-cash benefits provided to employees |
Filing & Compliance
- PAYE, KiwiSaver, ESCT: File employment information each payday; payments due by the 20th of the following month (or twice monthly for large employers).
- FBT: Quarterly returns due 20 July, 20 October, 20 January, and 31 May. Annual filing option available for smaller employers.
- ACC Levies: Invoices sent annually around July/August based on previous tax year's earnings.
In New Zealand, employers are responsible for deducting several taxes and contributions from employee salaries, including Pay As You Earn (PAYE) income tax, ACC Earners' Levy, KiwiSaver, Student Loan repayments, and Child Support.
PAYE Income Tax
PAYE is the primary tax deducted from employee wages and salaries. The amount deducted is based on the employee's earnings and their tax code. Tax codes consider an employee's filing status, income level, and any applicable entitlements to tax credits. Employers use PAYE deduction tables or calculators provided by Inland Revenue or integrated payroll software to determine the correct deduction amount. The tax rates for the 2024-2025 tax year (1 April 2024 to 31 March 2025) are as follows:
- $0 – $14,000: 10.50%
- $14,001 – $15,600: 12.82% (composite rate due to tax cuts effective 31 July 2024)
- $15,601 – $48,000: 17.50%
- $48,001 – $53,500: 21.64% (composite rate)
- $53,501 – $70,000: 30.00%
- $70,001 – $78,100: 30.99% (composite rate)
- $78,101 – $180,000: 33.00%
- $180,001 upwards: 39.00%
The proposed FBT (Fringe Benefit Tax) rate for the 2025-2026 tax year are expected to be:
- $0-$13,962: 11.73%
- $13,963 - $45,230: 21.21%
- $45,231 - $62,450: 42.86%
- $62,451 - $130,723: 49.25%
- $130,724+: 63.93%
Note: These FBT rates are proposed and might change.
ACC Earners' Levy
The ACC Earners' Levy funds New Zealand's Accident Compensation Corporation, which provides no-fault injury cover for all residents and visitors. The levy is calculated as a percentage of the employee's earnings up to a maximum amount. For the 2024-2025 tax year, the levy rate is applied to earnings up to $142,283, with a maximum levy payable of $2,276.52.
KiwiSaver
KiwiSaver is a voluntary work-based savings scheme for retirement. Employees can choose to contribute a percentage of their gross salary (3%, 4%, 6%, 8%, or 10%), and employers are required to contribute at least 3% of the employee's gross salary. These contributions are deducted directly from the employee's pay.
Student Loan Repayments
Employees who have a student loan are subject to compulsory repayments deducted from their salary. The repayment rate is based on their income level and is calculated as a percentage of their earnings above a certain threshold.
Child Support
Employers may also be required to deduct child support payments from employees' wages. The amount deducted is stipulated by the Inland Revenue based on court orders or agreements. A 'protected net earnings' threshold limits child support deductions to a maximum of 40% of an employee's net pay in certain circumstances, such as reduced pay due to unpaid leave. However, other deductions (PAYE, KiwiSaver, Student Loan) are still made even if the total exceeds 40%.
Additional Information
- Employers are responsible for accurate deductions and timely remittance to Inland Revenue, usually through payday filing.
- Employees provide their tax code (IR330) and, if contractors, their tax rate notification (IR330C). Employers must retain these forms for seven years.
- Inland Revenue publishes updated PAYE deduction tables annually. It's crucial to use the correct tables for the relevant pay period. These can be accessed on the Inland Revenue website (ird.govt.nz).
- Software and online calculators are available to assist with PAYE calculations.
