Your payslip shows how your gross pay becomes your net take-home pay through various deductions and contributions. Understanding each line item helps you verify you're being paid correctly, identify errors, plan your budget accurately, and understand your employment entitlements. This guide explains every component of a New Zealand payslip in plain English.
Gross pay is your total earnings before any deductions. It includes your base pay plus any additional payments.
| Component | What It Is | How Calculated |
|---|---|---|
| Salary/Wages | Your base pay for hours worked | Annual salary divided by pay periods, or hourly rate × hours |
| Overtime | Extra hours beyond normal | Usually time-and-a-half or double-time rates |
| Allowances | Additional payments for specific purposes | Car allowance, tool allowance, meal allowance |
| Bonuses | Performance or one-off payments | As agreed in employment contract |
| Commission | Sales-based earnings | Percentage of sales or performance-based |
| Holiday pay | Pay while on annual leave | Your ordinary weekly pay or average weekly earnings |
Pay As You Earn (PAYE) is income tax deducted from wages before you receive them. Your employer withholds it and pays IRD on your behalf.
| Tax Code | When Used | What It Means |
|---|---|---|
| M, ME, SB, S, SH | Main job, single income source | Standard tax rates with low-income threshold |
| SB SL, S SL, etc | Have student loan | Same as above plus student loan deductions |
| Secondary codes (SB, S, SH) | Second job or additional income | No low-income threshold, higher deduction rate |
| CAE | Casual agricultural employee | Specific rate for seasonal agricultural work |
| EDW | Election day workers | Special rate for electoral workers |
| ND | No declaration made | Higher withholding rate applied |
Critical: Wrong tax code means wrong amount of tax deducted. Too little = you'll owe IRD at year-end. Too much = interest-free loan to government until you get refund. Verify your tax code is correct for your circumstances.
The Accident Compensation Corporation (ACC) earners levy funds accident cover for all New Zealanders. Automatically deducted from wages.
If you're enrolled in KiwiSaver, contributions are automatically deducted from your pay.
| Element | How It Works | Notes |
|---|---|---|
| Your contribution | Minimum 3% of gross pay, can choose up to 10% | Your choice of contribution rate |
| Employer contribution | Minimum 3% of gross pay | Goes to your KiwiSaver, not on payslip deduction |
| Calculated on | Gross pay before tax | So reduces your taxable income slightly |
| Savings suspension | Can apply to pause contributions | Employer contributions may also stop during suspension |
If you have a student loan and earn above the repayment threshold, automatic deductions apply.
After working for an employer for one year, you're entitled to minimum four weeks annual leave. Your payslip should show your accrued balance.
| Aspect | How It Works | What To Check |
|---|---|---|
| Accrual rate | Four weeks per year of employment | Balance should increase with each pay period |
| First year | May be able to take leave in advance by agreement | Check your employment agreement |
| Payment rate | Higher of ordinary weekly pay or average weekly earnings | Should maintain regular income while on leave |
| When taken | Balance reduces by amount of leave taken | Verify reduction matches leave actually taken |
| On termination | Unused balance paid out | Check final pay includes accrued leave |
After six months employment, entitled to minimum five days sick leave per year. Unused days carry over, capped at maximum amount.
Paid leave for public holidays if they fall on days you would normally work. Alternative holidays if you work a public holiday.
Entitled to paid bereavement leave for death of close family member or person you had significant responsibility for.
Eligible employees entitled to unpaid parental leave, plus government-funded paid parental leave for primary carer.
| Error Type | What Happens | How to Fix |
|---|---|---|
| Wrong tax code | Too much or too little tax deducted | Provide correct tax code to employer immediately |
| Incorrect hours | Underpaid or overpaid for time worked | Notify payroll with timesheets/evidence |
| Missing overtime | Overtime hours not paid | Provide records of overtime worked |
| KiwiSaver wrong rate | Wrong percentage deducted | Confirm chosen contribution rate with employer |
| Leave not accruing | Annual/sick leave balance not increasing | Raise with employer, check employment agreement |
| Student loan not deducting | Should be deducting but isn't | Provide IRD notice to employer, avoid year-end debt |
Net pay (take-home) is what remains after all deductions. This is the amount that should hit your bank account.
You have the right to receive accurate, timely pay for work performed. If employer makes errors or refuses to correct them, you can seek help from Employment New Zealand or raise a personal grievance. Don't ignore payslip errors - they rarely fix themselves and can accumulate into significant problems over time.
Final insight: Your payslip is more than just a receipt for your pay - it's a record of your employment entitlements, tax obligations, and retirement savings. Understanding each component helps you verify you're being paid correctly, track your leave entitlements, ensure proper tax deductions, and catch errors before they become major issues. Check your payslip every pay period - it takes minutes but protects your financial interests.
Quiz on Understanding Your Payslip
If you've found a bug, or would like to contact us please click here.
Calculate.co.nz is partnered with Interest.co.nz for New Zealand's highest quality calculators and financial analysis.
© 2019–2025 Calculate.co.nz. All rights reserved.
All content on this website, including calculators, tools, source code, and design, is protected under the Copyright Act 1994 (New Zealand). No part of this site may be reproduced, copied, distributed, stored, or used in any form without prior written permission from the owner.
All calculators and tools are provided for educational and indicative purposes only and do not constitute financial advice.
Calculate.co.nz is part of the
realtor.co.nz,
GST Calculator,
GST.co.nz, and
PAYE Calculator group.
Calculate.co.nz is also partnered with
Health Based Building and
Premium Homes to promote informed choices that lead to better long-term outcomes for Kiwi households.