myIR, payments and more
On this page find out about:
- Employers' legal obligations
- Deducting child support
- Protected net earnings
- Employer toll free number
As an employer you are required by law to:
- deduct child support payments from an employees' wages if we instruct you to do so
- continue making the deductions until we, not the employee, instruct you to stop
- ensure employee privacy and protection from discrimination in child support matters.
It is an offence to discriminate against an employee or a potential employee because they pay child support.
If we want you to start deducting child support from an employees' wage or salary, we may contact you to find out:
- how often you pay wages
- the next regular payday or pay period for this employee
- whether you want an employee reference on the notice we send you.
Child support deductions have priority over any other deductions from an employee's pay. After deducting PAYE, you must deduct child support before you deduct anything else like:
- student loan repayments
- union fees.
Providing us with this information is not a breach of your employee's privacy and is allowed by law.
Read the full statement about employee privacy and prejudice in the Employer's guide (IR335).
We will then send you a notice explaining how to make and pay the deductions. We also send a copy of the notice to the employee. If the employee has questions about the deduction, please ask them to call us. You should continue to make the deductions as instructed.
You will receive additional notices if there are changes to the deductions amount, or if the deductions are to stop.
You will also need to deduct child support from the employee's holiday pay or payments in advance. These deductions must be at the usual rate.
In some cases we may ask you to deduct for a contractor or a commission agent. You are required to make these deductions also.
You can choose whether to receive the deductions notices as:
- a consolidated deduction notice showing all additions and changes to child support deductions made from your employee's pay, or
- an individual Child support deduction notice (CS503) and a consolidated deduction notice in the same envelope.
Getting it right
Deduct child support from your employees' pay after deducting PAYE and before any other payments.
Keep deducting child support until we tell you to stop. Your employee can't tell you to stop making payments.
If you're deducting child support from an employee's pay, the maximum amount of child support you can deduct is 40% of their net pay. This is called "protected net earnings".
Protected net earnings are normally only affected if you're paying an employee less than their usual pay. If the child support deduction we've asked you to make is more than 40% of your employee's net pay, only deduct 40% of their new net pay amount (see example below). You don't need to make up the balance in future pays. We'll make arrangements with your employee to pay the balance.
Protected net earnings only apply to child support. Other deductions should still be made even if your employee will receive less than 60% of their pay.
Example of protected net earnings deductions - full wages paid
John's normal child support deductions are $70.00 each week
|PAYE deductions (including ACC earners' levy)||$ 60.74|
|ACC earners' levy||$ 6.09|
|Net pay ($420 minus $60.74 + $6.09)||$365.35|
|40% of $365.35||$146.14|
Because $70.00 is less than 40% of John's net pay ($146.14), the full amount of child support should be deducted.
Example of protected net earnings deductions - reduced wages paid
John has had three days leave without pay, so his weekly wage is reduced.
|PAYE deductions (including ACC earners' levy)||$ 20.07|
|ACC earners' levy||$ 2.44|
|Net pay ($168 minus $20.07 + 2.44)||$150.37|
|40% of $150.37||$ 60.15|
Because $70.00 is more than 40% of John's net pay ($60.15) the full amount of child support cannot be deducted, otherwise John would be left with less than 60% of his net pay. Any other deductions would still have to be taken out of John's remaining pay.
We have a dedicated toll free number that employers can use for child support enquiries - 0800 220 222. This number is available between 8am and 5pm Monday to Friday.