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Payroll in New Zealand

Payroll in New Zealand

Payroll is the process of making the due payments to the company’s employees, covering both the payment itself, as well as the needed calculations, deductions and social security contributions.

Our team can help you with complete payroll services, including the requirements for payroll in New Zealand that focus on paying the employees, as well as making the deductions and contributions.

There is no payroll tax in New Zealand, however, employers need to be mindful of many different employment issues.

Outsourcing payroll services in NZ can be common, especially for medium and large companies. Nonetheless, the practice also has clear advantages in terms of compliance for small companies.

Our lawyers in New Zealand can provide you with information about the Employment Law, most notably your duties and responsibilities as an employer, including managing payroll in New Zealand.

If you need more information that what is provided in this article, we invite you to contact us.

You can also reach out to our team if you need accounting services.

Payroll in New Zealand

Payroll is the process of managing all of the due payments in relation to the company’s employees, both the ones to the employee himself and those to the authorities in New Zealand.

Implementing a payroll process (via a dedicated software in most cases) is a key step in effectively managing this essential business aspect.

There is no payroll in New Zealand tax, however, the employer does need to be mindful of the social security contributions.

Below, our lawyers in New Zealand list the main aspects that are mandatory for employers:

  • Minimum employment rights: signing an employment agreement with all of the employees and meeting the minimum wage requirements;
  • Mandatory filings: these are made with the Internal Revenue Department and include information about the social security contributions and deductions, as well as other details about the pay;
  • Social security contributions:  these include the KiwiSaver superannuation scheme (for employees that have opted into it) and the PAYE tax;
  • Record keeping: the employer is required to keep the payroll records for at least 7 years; this also includes information about the employees who are no longer employed with the company.

As far as minimum wage is concerned, the following values (before tax) were set by the NZ authorities in April 2022:

  • Adult employee: $21.20 per hour (up from $20.00);
  • Individual in training: $16.65 per hour, increased from $16.00;
  • Person in training: $16.96 per hour (up from $16.00).

The minimum wage varies every year, according to law.

Payroll services in NZ

The benefits of outsourcing payroll include having access to a team of professionals who work with a payroll software designed to withhold taxes and calculate complex cases.

Most payroll providers in New Zealand will offer standard packages that focus on the payment of the employees and the required deductions and submissions.

Some common payroll services include:

  1. Paying employees: setting up payroll in New Zealand means making the due payments to your employees according to a schedule; this also includes calculating the pay according to the types of leave the employee is entitled to;
  2. Employee deductions: KiwiSaver deductions, as well as the PAYE tax (pay as you earn); other payments apply according to the type of employees;
  3. Issuing payslips: providing the documents that prove the payment (only mandatory if stipulated in the employment agreement);
  4. Payroll records: dedicated services for storing the legal information that needs to be kept for a minimum amount of time.

Our accountants in New Zealand offer complete payroll services for companies, irrespective of their size and total number of employees. We assist with the calculations for annual leave, PAYE calculations, as well as IRD filing and payments as needed. Processing payroll can be time consuming, this is why businesses often choose to outsource this service.

If you would like to know more about the packages and options offered by payroll providers in NZ, please reach out to our team.

Our lawyers in New Zealand can give you more information about the laws in force if you are an employer.

Contact us for complete legal services for businesses and for individuals.