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1st April always see’s changes for payroll. Below is a summary of the 1 April 2025 updates:

• ACC Earners Levy – updating to 1.67 cents
• ACC Earner threshold – updating to $152,790.00
• Minimum Wage – Adult Min Wage increasing to $23.50. Starting Out/Training Wage increasing to $18.80
• Extra pay Tax in Termination Pays – Updated method for calculating Extra Pay Tax on Termination Pays
• Tax Codes – No change this year
• Student Loan thresholds – No change this year
• ESCT – ESCT Thresholds updated

These updates take effect for any pays made on or after 1st April 2025.  If your pay day is Monday 31st March, then the old rules apply for that week, and the changes will take effect for the pay paid on the 7th April.

If your pay date is 1st April for the prior week, then these new rules apply for that pay, even though the work was done in March.

Extra Pays

The annualised income calculation is now based on PAYE income payments from the last two paid pay periods prior to the final pay where the extra pay is being paid, rather than being based on payments received from the previous 4 weeks.

What do you need to do?

Software changes – Prepare a checklist of change to test, review and confirm all has been updated.

ESCT Rates – check and update your ESCT rates – are the current rates correct?  Are the thresholds and minimum payments correct?

Minimum wage – All employees meet new minimum wage.  Check those on salaries under $50k still meet the minimum wage test for ALL hours worked.

ACC Earner Levies – Check the tax calculated with minimum earners levy is calculating properly.

Special Tax Codes/Tailored Tax Codes – New certificates provided OR new IR330 provided OR No declaration rate used

Final Pays – check your software is calculating final pays correctly – every time.

We cover in full detail all of these payroll topics in our training via the Small Business Training Hub.   If you want to master payroll with confidence and ensure you get your payroll right, join us on the NZ Payroll Essentials: Mastering Compliance with Confidence training program.