Wages & pay

A quick summary of the things you should know about pay rates, tax and other deductions from your pay.

Deductions

Employers are required by law to deduct tax and ACC levies (see below) from your pay. They can’t make any other deductions unless you have previously agreed in writing or is covered in your collective agreement.

ACC is unique to New Zealand. It’s a scheme run by the Accident Compensation Corporation that means if you’re injured in any accident in New Zealand you don’t have to pay many of the costs for your medical treatment. You may also be eligible to be compensated for a portion of your wages if you can’t work.  For more information visit ACC’s website.

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Minimum pay rates

New Zealand has minimum wage rates that apply for ALL employees aged 16 years and over. Rates are reviewed every year.

Tax

You have to pay tax on what you earn from working. In New Zealand, tax is collected by Inland Revenue (also known as IRD) and you need an IRD number before an employer can pay you.

You can download an IRD number application form or call Inland Revenue on 0800 227 774 to have one sent to you (ask for “Language Line” if you want an interpreter).

Your employer usually takes your tax out of your pay before you receive it each payday. This system is called PAYE (Pay As You Earn). You can ask your employer for a PAYE record to show that your tax has been deducted and sent to the IRD.

To know how much PAYE to deduct, your employer will also need you to give them a tax code. The correct code depends on how many jobs you have.

You may also be eligible for a tax credit which would reduce the amount of tax you have to pay that year. A tax credit is usually calculated at the end of the income year and may mean that you get a tax refund.

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