PAYE

Each pay period you need to calculate and deduct PAYE. 

Each payday, you send Inland Revenue:

• the pay details for your employees
• employee details for new and departing employees, such as start and end date, contact details and date of birth.

There are three options for payday filing:

• directly from your accounting software, if it’s been enabled for payday filing
• online through Inland Revenue’s myIR service
• on paper forms, if your annual PAYE and ESCT (employer superannuation contribution tax) is less than $50,000 or if you’re a new employer.

PAYE is straightforward once you're set up, but different rules can apply to some payments – for example, lump sum payments like bonuses or retirement payouts, or to special types of workers. 

If you're not sure what you need to do, speak to Inland Revenue or a tax advisor.

The amount of PAYE you deduct depends on:

• the employee’s tax code
• how much they earn. 

To work out how much money to deduct, Inland Revenue has a calculator to help.

Use the PAYE calculator - Inland Revenue

How to fix filing errors

You can correct any mistakes in employment information you’ve already filed. You can do this either:

• online using Inland Revenue’s myIR service
• by paper
• by phone. 

If you file directly through accounting software or a payroll company, you may be able to do this through the software.

Payroll giving

If you use myIR to file and pay PAYE, your business can also offer employees payroll giving, where they can donate money from their pay towards a charity approved by Inland Revenue.

Avoid these common mistakes:

• Getting the calculations wrong – getting it right is important both for you and your employee. Use Inland Revenue's calculators to check.
• Failing to contact Inland Revenue if you realise you've made a mistake – errors can usually be corrected easily.