NZ PAYE Square-Up Calculator

Quick answer Your end-of-year position is the tax properly owed on your total income minus the PAYE actually deducted. Level pay all year lands near zero; a mid-year change of pay, a second job or an uneven bonus is what creates a refund or a bill.

This calculator works out whether you are due a tax refund or you owe IRD money once your PAYE year ends on 31 March, mirroring the automatic square-up IRD runs against your actual income. PAYE assumes you earn at the same rate all year, so anyone with multiple jobs, a mid-year pay change, a bonus, or investment income can end up over or under-taxed without knowing it. You enter your total salary and wage income from every employer for the year, other taxable income such as interest, dividends, rent or self-employed earnings, total PAYE (including ACC earners' levy) deducted from your payslips, other tax credits such as RWT or imputation credits, whether you qualified for the independent earner tax credit, and your student loan status and repayments withheld. The calculator returns your outcome as a refund, a bill, a small amount of tax to pay written off at $50 or less, or square, alongside an income tax breakdown showing taxable income, income tax, ACC levy, credits and residual income tax (RIT), plus a student loan reconciliation where relevant. It also flags whether your RIT tips you into provisional tax next year, or whether non-wage income means you must file an IR3. Run it once you have your final payslip so you can plan ahead. This is an estimate only; IRD's actual calculation uses payroll data from payday filing, and small rounding differences may occur.

Updated  2026/27 tax brackets, ACC levy at 1.75%, $156,641 cap.
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Annual income

$
Sum of gross earnings from every employer for the full tax year (1 April to 31 March).
$
Gross amount before tax. Include interest (before RWT), dividends (gross, including imputation credits), rental income, schedular payments, or net business income.

Tax already withheld

$
Sum of PAYE shown on all payslips for the year, or from your income summary in myIR.
$

Tax code & status

$

How the square-up works

PAYE is calculated by your employer assuming you will earn at your current pay rate for a full 52-week year. This gives a good approximation when you work full-year at one employer. But the system breaks down in these cases:

  • Partial-year work: If you worked only 6 months of the year, you may have been taxed in a higher bracket than your actual total annual income requires.
  • Multiple jobs: Each employer only sees the income they pay you. The secondary tax code approximates your combined bracket but isn't exact, especially if your total income crosses into a higher bracket.
  • One-off bonuses: A large bonus can push PAYE into a higher bracket for that pay period, over-withholding if your annual income stays below that bracket.
  • Investment income: Interest has RWT deducted at your chosen rate, which may not match your marginal rate. Dividends carry imputation credits that adjust the tax.

Residual Income Tax (RIT) and provisional tax

Your RIT is the balance of tax owed after all withholdings and credits. The key thresholds:

  • Tax to pay of $50 or less: Written off automatically when Inland Revenue issues your automatic income tax assessment (no action needed). IR3 filers do not get this write-off.
  • Tax to pay over $50, up to $5,000: Pay the balance by 7 February (or 7 April via tax agent).
  • Tax to pay over $5,000: You become a provisional taxpayer for next year. Pay your RIT by 7 Feb/7 April, plus three instalments of next year's provisional tax.
  • Negative RIT (a refund): There is no small-refund write-off. Any overpayment is refunded to the bank account Inland Revenue holds for you.

Do I need to file an IR3?

You must file an IR3 if you have any income that wasn't fully taxed at source:

  • Self-employment / sole trader income
  • Rental property income (or loss)
  • Overseas income (offshore dividends, foreign pensions, FIF)
  • Bright-line property sale proceeds
  • Shareholder salary from a close company
  • Income from a partnership
  • Schedular payments (WT deducted)

If you have only PAYE wage income (even from multiple jobs), you don't need to file. IRD will auto-calculate your square-up and notify you.

Sources

This tool provides an estimate only. IRD's auto-calculation will use actual payroll data submitted via payday filing. Small timing differences and rounding may produce minor variations.

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Frequently asked questions

What is a PAYE square-up in New Zealand?

A PAYE square-up is the year-end reconciliation where IRD compares the total PAYE (plus ACC earners' levy) deducted from your wages through the year with your actual tax liability based on your total annual income. If too much was deducted (because PAYE assumes you will earn at that rate all year and you didn't), you get a refund. If too little was deducted (multiple jobs, bonuses not fully taxed, secondary code mismatch), you owe a bill. IRD automatically does this square-up for most employees after 31 March each year and issues an auto-calculation notice.

What is residual income tax (RIT)?

Residual income tax is the tax you owe at year end after subtracting PAYE withheld, WT on schedular payments, RWT on interest, and other tax credits. If your RIT is over $5,000, you become a provisional taxpayer for the following year and must pay provisional tax in instalments (typically three per year on 28 August, 15 January, and 7 May). If RIT is under $5,000, you simply pay the balance by 7 February (or 7 April if you use a tax agent).

When do I have to file an IR3 return?

You must file an IR3 if you have any income that wasn't fully taxed at source. This includes: self-employed or contractor income, rental income, overseas income, capital gains subject to the bright-line test, dividends from overseas shares, or business income. Most wage earners with only PAYE income don't need to file an IR3 and receive an automatic assessment instead. If you're not sure, you can check your myIR account or use IRD's filing requirement tool.

Is there a write-off threshold for small tax bills?

Yes, but it only applies to tax you owe, never to refunds. Inland Revenue automatically writes off tax to pay of $50 or less when it issues an automatic income tax assessment, which keeps small rounding differences out of the system. If your bill is more than $50 you must pay it by 7 February, or 7 April if you use a tax agent. People who file an IR3 do not get the automatic write-off. Refunds are never written off for being small: if the square-up shows you overpaid, Inland Revenue pays the money into the bank account it holds for you.

Why might my PAYE be under-withheld?

Common reasons: (1) Two or more jobs where the secondary tax code bracket is lower than your actual combined marginal rate. (2) A bonus or commission that annualised higher than your regular pay. (3) Receiving Working for Families payments and ME code at the same time (you cannot get both). (4) Switching jobs mid-year and each employer treating their portion as though it were your full annual income (under-withholding at the lower brackets twice). (5) Receiving taxable investment income (interest, dividends) where RWT is at a lower rate than your marginal rate.