---
title: "New Zealand Tax and Payroll 2026 | PAYE, KiwiSaver"
description: "New Zealand has no employer payroll tax. The only employer cost is KiwiSaver, rising to 3.5% on 1 April 2026. PAYE income tax tops out at 39%."
canonical: https://www.teamed.global/country-hiring-guides/new-zealand/tax-and-payroll
---

New Zealand · Tax & payroll child

Served by Teamed vetted partner-entity network in New Zealand

# How does *New Zealand payroll tax* work in 2026?

There is no employer payroll tax in New Zealand. Your only mandatory employer payroll cost is KiwiSaver, the retirement scheme, and on 1 April 2026 the minimum employer contribution rises from 3% to 3.5% of gross pay. Income tax (PAYE) is deducted from the employee, across five bands that top out at 39%.

Last reviewed 13 June 2026 · New Zealand guide

![Auckland waterfront at golden hour with the Sky Tower rising behind harbour offices.](/images/country-guides/new-zealand-tax-payroll.webp)

Illustration · Auckland, New Zealand

Answer.cite this

New Zealand has no employer payroll tax and no employer social security charge. That makes it cheaper to employ than most markets. Your one mandatory employer payroll cost is KiwiSaver.

KiwiSaver is the workplace retirement scheme. The minimum employer contribution is 3% of gross pay. On 1 April 2026 that minimum rises to 3.5%. The employee puts in at least 3% as well (KiwiSaver Act 2006).

Income tax comes off the employee, not the employer. PAYE runs across five bands. It starts at 10.5% and rises to 39% on the highest pay. You deduct it each payday and pass it to Inland Revenue.

## What does an employer pay in New Zealand payroll costs?

Almost nothing on top of salary. New Zealand has no employer payroll tax and no employer social security charge.

Your only mandatory employer cost is KiwiSaver. The minimum is 3% of gross pay. It rises to 3.5% on 1 April 2026 (KiwiSaver Act 2006).

| Employer cost | Rate | Applies to |
| --- | --- | --- |
| KiwiSaver (retirement) | 3% | Gross pay of every enrolled employee |
| KiwiSaver from 1 April 2026 | 3.5% | Gross pay of every enrolled employee |

This is what surprises most first-time employers in New Zealand. There is no employer national insurance, no employer social security percentage, and no separate payroll tax. The headline cost of a New Zealand hire is close to the salary itself.

### KiwiSaver is the one real employer cost

KiwiSaver is the workplace retirement scheme set up by the KiwiSaver Act 2006. You contribute at least 3% of an enrolled employee’s gross pay. From 1 April 2026 the minimum employer contribution rises to 3.5%, so model the higher figure for any 2026 hire. New employees are auto-enrolled and can opt out within their first few weeks.

### What about ACC

Employers also pay an ACC Work levy to the Accident Compensation Corporation, which funds cover for workplace injuries. The rate depends on your industry classification, so it is not a single fixed payroll percentage. Teamed itemises the exact ACC levy for your activity on every invoice, alongside KiwiSaver, so you see the real all-in cost before you hire.

## What comes off a New Zealand employee's pay?

Two things come off most paydays. PAYE income tax goes to Inland Revenue. KiwiSaver goes to the employee's retirement account.

The KiwiSaver employee minimum is 3% of gross pay. The employee can choose to put in more (KiwiSaver Act 2006).

| Employee deduction | Rate | Applies to |
| --- | --- | --- |
| PAYE income tax | 10.5% to 39% | Taxable pay, by band |
| KiwiSaver (retirement) | 3% | Gross pay, if enrolled |

### KiwiSaver, the employee side

The default employee KiwiSaver contribution is 3% of gross pay. Employees can elect a higher rate of 4%, 6%, 8% or 10% instead. The employer match stays at the statutory minimum unless your policy says otherwise. KiwiSaver is deducted after PAYE, not before, so it does not change the income tax due.

### The ACC Earners' levy

A small ACC Earners’ levy also comes off employee pay to fund cover for non-work injuries. Inland Revenue collects it through the PAYE system at a flat rate set each year, capped at a maximum income. Because the rate and cap change annually, Teamed applies the current year’s figure on every run rather than a number that drifts out of date.

## New Zealand PAYE income tax bands for 2026

PAYE runs across five bands. The lowest band is 10.5%. The bands rise through 17.5%, 30% and 33%.

The top band is 39% on the highest income. There is no tax-free band. The first dollar is taxed (Income Tax Act 2007).

| Band | Rate |
| --- | --- |
| Lowest income band | 10.5% |
| Second band | 17.5% |
| Third band | 30% |
| Fourth band | 33% |
| Top band | 39% |

New Zealand taxes income progressively, so each slice of pay is taxed at its own rate, not the whole salary at the top rate. The first slice is taxed at 10.5%, the next at 17.5%, and so on up to 39% on the highest earnings. There is no tax-free allowance, so PAYE applies from the first dollar of pay. The exact dollar boundaries between bands are set by [Inland Revenue](https://www.ird.govt.nz/income-tax/income-tax-for-individuals/tax-codes-and-tax-rates-for-individuals/tax-rates-for-individuals) and were last updated for the 2025-26 tax year.

### Tax codes drive the deduction

Every employee gives you a tax code on an IR330 form. The code tells the payroll system which rate table to use and whether a student loan or other deduction applies. Use the wrong code and the PAYE figure is wrong, even when the band rates are right. Teamed validates each new hire’s tax code before the first run.

## How does New Zealand PAYE filing and payday filing work?

You file payday filing with Inland Revenue every time you pay staff. The deductions are due to Inland Revenue by the 20th of the following month.

Larger employers pay twice a month. Payday filing must reach Inland Revenue within two working days of each pay run.

Inland Revenue · Pay As You Earn (PAYE)

Employers deduct PAYE from each employee’s pay and file the details to Inland Revenue through **payday filing**, due within two working days of every pay run. The deducted PAYE is then paid to Inland Revenue by the **20th of the following month** for most employers. Late payment carries interest and late-payment penalties set by Inland Revenue.

Source: [Inland Revenue: tax rates for individuals](https://www.ird.govt.nz/income-tax/income-tax-for-individuals/tax-codes-and-tax-rates-for-individuals/tax-rates-for-individuals)

New Zealand does not fix how often you pay staff. Weekly, fortnightly or monthly are all allowed, and the pay cycle is set in the employment agreement (Wages Protection Act 1983). Fortnightly is the most common pattern. Whatever cycle you choose, the filing rhythm is the same:

- **Payday filing** to Inland Revenue, within two working days of each pay run
- **PAYE payment** to Inland Revenue, by the 20th of the following month for most employers
- **KiwiSaver contributions** to Inland Revenue, paid alongside PAYE

Filing is done through Inland Revenue’s myIR portal or directly from payroll software. Payday filing is the part that trips up overseas employers, because it happens every single pay run, not once a month. Miss the rhythm and the penalties stack up across the year.

1. Collect pay data Gather salary, hours, bonuses and any taxable allowances for the pay period before the run closes.
2. Apply the tax code Read each employee's tax code from their IR330 form and apply the matching PAYE rate table, plus any student loan deduction.
3. Calculate PAYE and KiwiSaver Work out PAYE across the income bands, then take the employee KiwiSaver contribution. Add the employer KiwiSaver and ACC levy on top.
4. File the payday return Send payday filing to Inland Revenue within two working days of the pay run, every run, not once a month.
5. Pay Inland Revenue Pay the deducted PAYE and KiwiSaver to Inland Revenue by the 20th of the following month for most employers.

## KiwiSaver and retirement contributions in the payroll stack

KiwiSaver is New Zealand's workplace retirement scheme. The employer pays at least 3% and the employee pays at least 3% of gross pay.

The employer minimum rises to 3.5% on 1 April 2026 (KiwiSaver Act 2006).

KiwiSaver works as a matched contribution between employer and employee:

- **Employee side**: a minimum of 3% of gross pay, with the option to raise it to 4%, 6%, 8% or 10%.
- **Employer side**: a minimum of 3% of gross pay, rising to 3.5% from 1 April 2026.

Because the employer minimum is moving up to 3.5% in April 2026, any salary model built on the old 3% rate understates your real cost for the year. Budget the higher figure now. New employees are auto-enrolled and have a short window to opt out.

### KiwiSaver is not social security

KiwiSaver funds the employee’s own retirement account, not a state social security pot. New Zealand has no employer social security charge at all, which is why KiwiSaver is the only recurring employer payroll cost. The state pension, NZ Super, is funded from general taxation, not from a payroll levy.

## How does Teamed handle New Zealand payroll for you?

Teamed becomes your legal [employer of record](/lp/employer-of-record) in New Zealand for [**from $599 per employee per month**](/pricing), with **zero FX mark-up** in any currency.

PAYE, payday filing, KiwiSaver and the full New Zealand employment law stack run on **one platform**.

**Real HR and legal experts** handle your New Zealand hires, from the first employment agreement through every payday filing and PAYE payment by the 20th. **An actual person**, not a chatbot or a pooled queue. There is **no setup fee** and **no exit fee**. Employer cost **passes through at cost, itemised** on every invoice, so you see KiwiSaver and the ACC levy as separate lines, never a blended figure.

EOR payroll, contractor onboarding, and entity setup all live on **one platform**. A New Zealand contractor who converts to payroll keeps their record. That same employee can **graduate** from EOR to your own New Zealand entity without switching systems. Run the [Employer Cost Calculator](https://www.teamed.global/tools/employer-cost) to see the full picture, including the 1 April 2026 KiwiSaver rise to 3.5%. EOR is the right model for a first New Zealand hire, **until it isn't**. Start from [the New Zealand hiring overview](/country-hiring-guides/new-zealand).

Key sources: [Inland Revenue KiwiSaver for employers](https://www.ird.govt.nz/kiwisaver/kiwisaver-employers/making-kiwisaver-deductions-and-contributions), [KiwiSaver Budget 2025 changes](https://www.ird.govt.nz/kiwisaver-changes), and [Employment New Zealand on pay periods](https://www.employment.govt.nz/pay-and-hours/pay-and-wages/pay-periods-and-paydays).

## Frequently asked questions

What does an employer pay in New Zealand payroll costs in 2026?

Very little on top of salary. New Zealand has no employer payroll tax and no employer social security charge. The only mandatory employer payroll cost is KiwiSaver, at a minimum of 3% of gross pay, rising to 3.5% on 1 April 2026. Employers also pay an ACC Work levy set by industry, which is not a single fixed percentage.

What is deducted from a New Zealand employee's pay?

PAYE income tax goes to Inland Revenue, deducted by band across the pay. KiwiSaver of at least 3% of gross pay goes to the employee's retirement account, with the option to raise it to 4%, 6%, 8% or 10%. A small ACC Earners' levy is also collected through PAYE.

What are the New Zealand PAYE income tax bands for 2026?

PAYE has five bands. It starts at 10.5% on the lowest income, then 17.5%, then 30%, then 33%, and 39% on the highest earnings. There is no tax-free band, so PAYE applies from the first dollar. The dollar boundaries between bands are set by Inland Revenue and were last updated for the 2025-26 tax year.

When must New Zealand PAYE be filed and paid?

You file payday filing to Inland Revenue within two working days of each pay run, every run. The deducted PAYE and KiwiSaver are then paid to Inland Revenue by the 20th of the following month for most employers. Larger employers pay twice a month. Late payment carries interest and penalties set by Inland Revenue.

How does KiwiSaver work in New Zealand in 2026?

KiwiSaver is the workplace retirement scheme. The employer and employee each contribute a minimum of 3% of gross pay. From 1 April 2026 the minimum employer contribution rises to 3.5%, with a further rise to 4% scheduled for 1 April 2028. Employees are auto-enrolled and may opt out within a short window after starting.

Teamed Legal Operations

Employers used to a payroll tax expect New Zealand to be expensive on top of salary. It is the opposite. There is no employer social security charge. The catch is payday filing, which lands with Inland Revenue after every single pay run, not monthly. That rhythm is where overseas employers slip, and the penalties stack quietly across the year.

A note from Tom Price-Daniel

New Zealand has no employer payroll tax, so KiwiSaver is the one cost that matters on top of salary.  
That employer minimum rises to 3.5% on 1 April 2026, so model the higher figure now.  
PAYE comes off the employee and tops out at 39%. File it every payday.

Tom Price-Daniel · Co-founder, Teamed

## Related New Zealand guides

- [Hiring in New Zealand, overview](/country-hiring-guides/new-zealand)parent
- [New Zealand termination and severance](/country-hiring-guides/new-zealand/termination-and-severance)sibling
- [Employer of Record overview](/lp/employer-of-record)core
- [Pricing, Zero FX Fixed](/pricing)core
- [Employer Cost Calculator](https://www.teamed.global/tools/employer-cost)tool
- [Talk to an expert](https://www.teamed.global/contact)CTA

A note on this page.

This is a guide, not legal, tax or accounting advice. Rules change and vary by jurisdiction. Verify current requirements with Inland Revenue and Employment New Zealand, or speak to a qualified professional, before relying on any specific framework. The KiwiSaver minimum employer contribution rises to 3.5% on 1 April 2026 and is scheduled to rise again to 4% on 1 April 2028. Income tax band boundaries and the ACC levy rates are set each year by Inland Revenue and should be checked for the current tax year.