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Employer responsibilities
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Employer responsibilities

Understanding PAYE deductions

As an employer, you're responsible for calculating and deducting income tax and ACC earners' levy from your employees' salary or wages each pay period and sending these deductions to us on their behalf. This is known as PAYE (pay as you earn).

PAYE basics

If you have employees, you need to:

 Working out your PAYE deductions

If you're not using payroll software, you can calculate PAYE and other deductions with our calculator or use the tables in our guides:

Both the calculator and the tables will help you work out standard PAYE (income tax and ACC earners' levy), KiwiSaver, and student loan repayment deductions.

Find out more about some situations that require different calculations:

The calculator can also work out a gross salary (the total salary before deductions) based on take home pay (the amount paid after deductions)

You can also find out about:

Deducting child support payments from wages

If any of your employees need to have child support payments deducted from their wages, we'll send you a letter telling you how much to deduct. You can enter this amount into the PAYE deductions calculator and it will factor the deduction in.

 Filing PAYE returns and paying deductions

Each month you need to send us two returns:

Most employer returns need to be filed by 20th of the following month. Payment is due on the same date. You can file returns and pay deductions online through ir-File.

You must file online if you have gross annual PAYE (including employer superannuation contribution tax) of $100,000 or more.

When to pay PAYE

You can check when to pay your deductions by using our Tax due date calculator.

Different rules apply to employers with:

If you make a mistake in your return

To correct a mistake in your employer monthly schedule after it has been filed, please fill in an Employer monthly schedule amendments (IR344) form.

Find out more about correcting your employer monthly schedule

PAYE intermediaries

You can outsource your payroll to a PAYE intermediary. They will do the job for you and work with us on your behalf.

If you pay less than $500,000 a year in PAYE and ESCT (employer superannuation contribution tax) and use a PAYE intermediary, you may qualify for a subsidy.

Find out more about PAYE intermediaries and the subsidy

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