How it's calculated
Your employer works out PAYE for every pay using the method Inland Revenue publishes for payroll software, and the same method produces the IR340 and IR341 PAYE tables. The calculator follows it step by step for the 2026–27 tax year (1 April 2026 to 31 March 2027).Inland Revenue
- PAYE income tax. Your pay is turned into a yearly figure and taxed at the individual rates: 10.5% up to $15,600, 17.5% up to $53,500, 30% up to $78,100, 33% up to $180,000 and 39% above that.Inland Revenue
- ACC earners' levy. 1.75% of your earnings, up to a maximum of $2,741.22 a year (earnings up to $156,641). It is collected as part of PAYE; the calculator shows it as its own line.Inland Revenue
- Independent earner tax credit (tax code ME). Up to $520 a year off your PAYE if your income is between $24,000 and $70,000.Inland Revenue
- Student loan (SL). 12% of each pay above the pay-period threshold, which is $464 a week or $928 a fortnight.
- KiwiSaver. Your chosen rate of gross pay. From 1 April 2026 the default is 3.5%, and your employer adds at least 3.5% on top of your pay, less employer superannuation contribution tax (ESCT).
The formula
For tax codes M and ME, for each pay:
- Annual income = pay × pays in the year (52, 26, 13 or 12), with cents dropped.
- Annual tax = tax on that income by bracket.
- ACC levy = annual income × 1.75%, or the maximum levy if the income is at or above the maximum.
- IETC (ME only) = the credit for that income.
- Weekly PAYE = (tax + ACC levy − IETC) ÷ 52, cut to whole cents. For other pay periods: weekly PAYE × 52 ÷ pays in the year, cut to whole cents.
For secondary codes (SB, S, SH, ST, SA), PAYE is a flat rate of each pay in whole dollars: the code's tax rate plus the ACC levy. Student loan on a secondary job is 12% of all its pay. KiwiSaver is your rate × gross pay, cut to whole cents.
Worked example
A $70,000 salary paid fortnightly on tax code M, with 3.5% KiwiSaver and no student loan, gives take-home pay of $2,042.50 a fortnight, or $53,105 over the year.
| Line | Year | Month | Fortnight | Week |
|---|---|---|---|---|
| Gross pay | $70,000 | $5,833 | $2,692 | $1,346 |
| PAYE income tax | -$13,220 | -$1,102 | -$508 | -$254 |
| ACC earners' levy | -$1,225 | -$102 | -$47 | -$24 |
| KiwiSaver (3.5%) | -$2,450 | -$204 | -$94 | -$47 |
| Take-home pay | $53,105 | $4,425 | $2,043 | $1,021 |
With a student loan on the same pay (tax code M SL), the loan takes $5,504 a year and take-home falls to $47,601.
On $52,000 a year with tax code ME, the independent earner tax credit lowers PAYE: take-home is $803.50 a week, against $793.50 on tax code M.
Assumptions and limitations
- Regular pay only. Bonuses, back pay, holiday pay paid as a lump sum and redundancy payments use the extra pay rules and are not included.
- The same pay all year. PAYE treats each pay as if you earned it every pay period. If your pay changes, or you work part of the year, your end-of-year tax assessment can differ and you may get a refund or a bill.
- Pick the right tax code. ME is only for people who qualify for the independent earner tax credit. For a second job, choose the secondary code that matches your total income from all jobs.
- Not included: child support, payroll giving, tailored tax codes, special student loan deduction rates and KiwiSaver savings suspensions.
- Employer contribution. Shown for information only: it is paid on top of your salary, so it does not reduce your take-home pay (unless your employment agreement pays KiwiSaver out of a total remuneration package).
For your yearly tax by bracket see the NZ income tax calculator; for your KiwiSaver balance, the KiwiSaver calculator.