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Te tāke i te utu hararei Taxing holiday pay

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Your employees receive holiday pay either when they take annual leave or when they do not work on a public holiday. You include it as earnings when you pay it to an employee.

There are different ways to pay and work out tax on holiday pay.

Holiday pay in an employee’s regular pay

You can pay holiday pay in an employee’s regular pay:

  • instead of their salary or wages when they take annual leave
  • as an extra 8% of their gross earnings each time you pay them.

When you include holiday pay in an employee’s regular pay you can use our calculator to work out:

  • PAYE deductions
  • student loan repayments
  • KiwiSaver deductions, employer contributions and ESCT.
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Deductions from salary or wages

Employers and employees can work out how much PAYE should be withheld from wages.

Go to this tool