How to Read Your NZ Payslip: PAYE, ACC Levy, KiwiSaver and Student Loan Explained (2025–26)

Most New Zealanders look at one number on their payslip: the amount that lands in the bank. But the four or five deductions above it decide whether that number is right, and a surprising share of payslips carry a mistake that nobody notices for years. Here is what each line means for the 2025–26 tax year and how to check it in five minutes.

Gross pay

Your salary or wages before anything is taken off, for the pay period shown. If you are salaried, it is the annual figure divided by the number of pays in the year (26 for fortnightly, 52 for weekly, 12 for monthly). Check it against your employment agreement once a year and after any pay rise; an unapplied increase is one of the most common payroll errors.

PAYE

Pay As You Earn is income tax deducted at source. New Zealand uses progressive brackets, and since 1 April 2025 they are: 10.5% on the first $15,600; 17.5% from $15,601 to $53,500; 30% from $53,501 to $78,100; 33% from $78,101 to $180,000; and 39% above that. The brackets apply to the year, so payroll software estimates your annual income from each pay and taxes it proportionally.

The important word is marginal. Someone on $80,000 does not pay 33% on everything; they pay 10.5% on the first slice, 17.5% on the next, 30% on the next, and 33% only on the $1,900 above $78,100. If a colleague tells you a pay rise "pushed them into a higher bracket" and they took home less, the arithmetic does not support it; every extra dollar is only ever taxed at that dollar's rate.

ACC earners' levy

Usually shown inside the PAYE figure rather than separately. For 2025–26 it is 1.67% of your earnings up to a maximum liable income of $152,790, so the most anyone pays is $2,551.59 for the year. It funds ACC cover for injuries outside work. From 1 April 2026 the rate rises to 1.75% with a higher cap. Because it is bundled into PAYE, the "tax" line on a payslip is always a little more than the income tax brackets alone would give.

Tax code

The code tells payroll which rate table to use. For your main job it is M (or ME if you are eligible for the independent earner tax credit), with SL added if you have a student loan. Secondary jobs use S, SH, ST or SA depending on your total income. The most expensive common mistake is a secondary code on a main job, or an M code on two jobs at once, which under-taxes you all year and produces a bill in July. If you have changed jobs or taken on a second one, check the code on the first payslip.

KiwiSaver

Two lines: your contribution and your employer's. Your rate is whatever you chose — 3%, 4%, 6%, 8% or 10% of gross pay until 31 March 2026, when the default rate for new and default members rises to 3.5%. Your employer must contribute at least the same default rate, and their contribution has employer superannuation contribution tax (ESCT) taken off before it reaches your account, so the amount that arrives in KiwiSaver is less than the headline percentage. The government adds up to $260.72 a year on top if you personally contribute at least $1,042.86 between 1 July and 30 June.

Student loan

If your code has SL, 12% of everything you earn over the repayment threshold (about $24,128 for 2025–26, which payroll applies per pay period) goes to your loan. It is not interest; it is repayment, and it stops the day the loan is cleared. Check the balance on myIR twice a year so the deductions stop when they should.

Other deductions

Child support, court fines and voluntary payments (social club, salary sacrifice, union fees) appear below tax. Anything you did not agree to in writing should be queried.

The five-minute check

  1. Gross matches your agreement and pay frequency.
  2. Tax code is right for this job (M or ME for your main job, S-series for a second).
  3. KiwiSaver percentage matches what you chose, and the employer line is there.
  4. Student loan line present only if you still owe, absent if you do not.
  5. Net pay equals gross minus every deduction shown; if it does not, something is being taken off without a line.

Run your gross through the free income tax and take-home pay calculator and compare it with the payslip. A few dollars' difference is rounding; tens of dollars per pay is a code or rate problem worth raising with payroll this week.

General information for the 2025–26 tax year, not tax advice. Rates from Inland Revenue and ACC; confirm your own position at ird.govt.nz.

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