Payment Summary / Income Statement

The New Zealand Income Statement is the annual tax summary generated by the Inland Revenue Department, IRD, using payroll information submitted by employers throughout the tax year. Instead of relying on a separate year-end wage certificate, New Zealand uses a real-time payroll reporting system called payday filing.

Under payday filing, employers report employee earnings, PAYE tax, KiwiSaver contributions, student loan deductions, child support, ESCT, and other payroll data to IRD after every payday. This information is then used to prepare each employee’s annual Income Statement.

For global companies hiring in New Zealand, this means payroll compliance is not just a monthly or annual activity. It is a recurring process tied directly to every pay run. Businesses expanding into the market can use Mercans’ Employer of Record services to hire employees in New Zealand without setting up a local entity, while managing payroll, tax, and statutory reporting obligations compliantly.

What Is an Income Statement in New Zealand?

An Income Statement in New Zealand is an IRD-generated summary showing a person’s income, tax paid, and any refund or tax to pay for the tax year.

It is created automatically from payroll and income data submitted to IRD, including information reported by employers through payday filing. For most salary and wage earners, the Income Statement replaces the need to file a separate annual income tax return.

The Income Statement may show:

• Total salary and wages earned
• PAYE tax deducted
• KiwiSaver contributions
• Student loan deductions
• Child support deductions
• Tax credits applied
• Schedular payments where relevant
• Refund due or tax payable
• Final year-end tax position

Employees can view their Income Statement through myIR, the online portal operated by Inland Revenue.

What Is Payday Filing?

Payday filing is the New Zealand payroll reporting system that requires employers to send employment information to IRD every time they pay employees.

This system replaced the older monthly Employer Monthly Schedule, also known as EMS or IR348. Since payday filing became mandatory, employers now provide IRD with near real-time payroll data instead of waiting until the end of the month.

Payday filing covers:

• Employee gross earnings
• PAYE deductions
• KiwiSaver employee contributions
• Employer KiwiSaver contributions
• ESCT on employer superannuation contributions
• Student loan deductions
• Child support deductions
• ACC Earners’ Levy information
• New employee details
• Employee leaving dates
• Schedular payment information

This approach gives IRD more accurate payroll data and helps employees receive faster, more accurate year-end tax assessments.

Why New Zealand Payroll Compliance Is Different

New Zealand payroll is highly digital, fast-moving, and closely connected to government systems. Employers must report payroll information quickly after each pay run, and the data must be accurate because it feeds directly into employee tax records.

This makes New Zealand payroll compliance different from countries where employers issue a single annual certificate. In New Zealand, the year-end Income Statement is built from payroll data submitted throughout the year.

For employers, this means every pay cycle matters. Errors in payday filing can affect the employee’s Income Statement, tax refund, student loan balance, KiwiSaver records, or child support position.

Mercans’ global payroll services help international employers manage payroll reporting, PAYE calculations, employee deductions, and country-specific compliance requirements across New Zealand and other markets.

How Payday Filing Creates the Income Statement

The Income Statement is the final result of data submitted during the year.

The process works like this:

• The employer processes payroll.
• PAYE and other deductions are calculated.
• Employment information is submitted to IRD after payday.
• IRD stores the data in the employee’s tax account.
• The data is updated throughout the tax year.
• At year end, IRD prepares the Income Statement.
• The employee receives a refund, tax bill, or balanced assessment.

Because the Income Statement depends on payday filing, payroll accuracy throughout the year is essential.

Who Must Use Payday Filing?

Most employers in New Zealand must submit employment information to IRD through payday filing.

This includes:

• New Zealand companies with employees
• Sole traders employing staff
• Partnerships with employees
• Public-sector employers
• Charities and non-profit organizations with paid workers
• Trusts and estates paying wages or schedular payments
• Foreign companies operating in New Zealand
• Employers paying directors’ fees, bonuses, or lump sums
• Businesses paying contractors subject to schedular withholding tax

Self-employed individuals without employees generally do not submit payday filing for themselves. They usually file an individual income tax return, known as an IR3, if required.

Companies hiring in Auckland, Wellington, Christchurch, Hamilton, Tauranga, or other New Zealand locations can use Mercans’ EOR solutions to employ talent while outsourcing local payroll, PAYE, and statutory compliance responsibilities.

Who Receives an Income Statement?

An Income Statement may be issued to individuals who have income reported to IRD during the tax year.

This can include:

• Employees earning salary or wages
• Workers with PAYE deducted
• Recipients of schedular payments
• People receiving New Zealand Superannuation
• Individuals receiving taxable government benefits
• Employees with KiwiSaver contributions
• Workers with student loan or child support deductions

Most employees do not need to prepare the Income Statement themselves. IRD generates it using the payroll and tax information already filed.

Key Payday Filing Forms in New Zealand

Although New Zealand payroll reporting is mainly electronic, several IRD forms remain important for payroll administration.

IR348 Employment Information

The IR348 is the main employment information return submitted under payday filing. It includes employee income, PAYE, KiwiSaver, ESCT, student loan, child support, and other payroll details.

IR346K New Employee and KiwiSaver Details

The IR346K is used to report new employee details and KiwiSaver information. Employers submit this information when a new employee starts work.

IR344 Employment Information Amendments

The IR344 is used to correct employment information previously submitted to IRD.

IR330 Tax Code Declaration

The IR330 is completed by employees to confirm their tax code. Employers must keep this form on record.

IR330C Contractor Tax Rate Notification

The IR330C is used by contractors receiving schedular payments to confirm the withholding rate that should apply.

These documents help ensure that payroll data is correctly reported and that the employee’s Income Statement is accurate.

Payday Filing Deadlines

Payday filing deadlines depend on how the employer submits employment information.

For electronic filing, employment information must usually be submitted within 2 working days of payday.

For paper filing, where allowed, the deadline is usually 10 working days after payday.

Employers with annual PAYE and ESCT of NZD 50,000 or more are generally required to file electronically. Smaller employers may still choose electronic filing because it is faster and easier to manage.

Employers may need to submit payday filing:

• Weekly
• Fortnightly
• Monthly
• Multiple times in a month if different employee groups are paid on different dates

Because the deadline is linked to payday, companies need strong payroll calendars and approval workflows.

PAYE Payment Deadlines

Payday filing and PAYE payment are related, but they do not always happen on the same date.

Most employers pay PAYE and deductions to IRD by the 20th of the following month.

Large employers may need to pay twice monthly if their annual PAYE and ESCT exceed the applicable threshold.

For twice-monthly payers:

• Deductions from the 1st to the 15th of the month are generally due by the 20th of the same month
• Deductions from the 16th to the end of the month are generally due by the 5th of the following month

If a deadline falls on a weekend or public holiday, payment is usually due on the next working day.

PAYE Tax in New Zealand Payroll

PAYE, Pay As You Earn, is the income tax deducted from employees’ wages or salary. Employers calculate PAYE based on the employee’s earnings, tax code, and applicable deductions.

PAYE may include:

• Income tax
• ACC Earners’ Levy
• Student loan deductions where applicable
• Child support deductions where instructed
• Adjustments for tax credits

The PAYE deducted during the year is used by IRD when preparing the employee’s Income Statement.

New Zealand Tax Codes

Tax codes are essential for accurate payroll calculations and Income Statement results.

Common New Zealand tax codes include:

• M: Main employment
• M SL: Main employment with student loan
• ME: Main employment with Independent Earner Tax Credit
• ME SL: Main employment with Independent Earner Tax Credit and student loan
• S, SH, ST, SA: Secondary income tax codes
• S SL, SH SL, ST SL, SA SL: Secondary income with student loan
• WT: Schedular payments
• CAE: Casual agricultural employees
• STC: Special tax code issued by IRD

Using the wrong tax code can result in too much or too little PAYE being deducted, which affects the final Income Statement.

Independent Earner Tax Credit

The Independent Earner Tax Credit, IETC, may apply to eligible New Zealand tax residents within a specific income range.

Employees who qualify may use the ME or ME SL tax code so the credit is applied through payroll during the year.

At year end, IRD reviews the employee’s actual income and confirms whether the IETC was applied correctly. Any difference is reflected in the Income Statement.

KiwiSaver Payroll Reporting

KiwiSaver is New Zealand’s workplace savings scheme. Employers must report KiwiSaver contributions through payday filing.

Payroll teams may need to manage:

• Employee KiwiSaver deductions
• Employer KiwiSaver contributions
• Employee opt-in and opt-out status
• Contribution rate changes
• New employee auto-enrolment
• ESCT on employer contributions

KiwiSaver information is submitted through employment information returns and reflected in the employee’s tax and savings records.

ESCT in New Zealand Payroll

ESCT, Employer Superannuation Contribution Tax, is the tax applied to employer superannuation contributions, including employer KiwiSaver contributions.

The ESCT rate depends on the employee’s income and employer contribution level. Employers must calculate it correctly each pay period and report it through payday filing.

Incorrect ESCT calculations can affect payroll costs, reporting accuracy, and employee records.

ACC Earners’ Levy

The ACC Earners’ Levy helps fund New Zealand’s accident compensation scheme. It is generally included within PAYE calculations and applies to liable earnings up to a set annual threshold.

Because ACC levy rates and thresholds can change, employers must update payroll systems when new rates apply.

Payroll teams should review ACC settings every tax year, especially for pay runs after 1 April.

Schedular Payments and Contractors

Some contractors in New Zealand receive schedular payments, which are subject to withholding tax.

Employers or payers may need to collect an IR330C from the contractor to confirm the correct withholding rate.

If the contractor does not provide the required tax rate notification, a higher non-notified rate may apply.

Businesses should carefully review whether a worker is an employee or contractor, because misclassification can create tax, employment law, and payroll compliance risk.

Common Payroll Mistakes in New Zealand

Payday filing is frequent, which means small payroll errors can repeat quickly if not corrected.

Common issues include:

• Missing the 2-working-day filing deadline
• Using the wrong employee tax code
• Missing or incorrect IRD numbers
• Not submitting new employee details on time
• Incorrect KiwiSaver opt-in or opt-out status
• Applying the wrong ESCT rate
• Failing to update employee leaving dates
• Incorrect student loan deductions
• Incorrect child support deductions
• Not applying schedular withholding correctly
• Late PAYE payments
• Incorrect ACC Earners’ Levy settings
• Poor payroll record retention
• Contractor and employee misclassification

Employers should review payroll data before every submission and reconcile payroll records regularly.

Penalties for Payday Filing Errors

IRD may apply penalties when employers fail to meet payday filing or payment obligations.

Penalty risks can arise from:

• Late employment information filing
• Late PAYE payment
• Missing payroll returns
• Incorrect employee information
• Failure to file electronically when required
• Underpayment of PAYE or deductions
• Repeated tax code or IRD number errors
• Shortfall amounts caused by careless or intentional mistakes

Late payment can also result in interest and additional charges. Employers that identify mistakes should correct them promptly and make voluntary disclosures where appropriate.

Payroll Record Keeping in New Zealand

Employers must keep accurate payroll and employment records. These records support payday filing, PAYE payments, leave calculations, employee rights, and IRD reviews.

Payroll records may include:

• Employee details
• Tax code declarations
• Payroll calculations
• Time and wage records
• Leave records
• KiwiSaver information
• Student loan deductions
• Child support deductions
• IR348 submissions
• Payroll correction records
• Contractor withholding documentation

Employers are generally expected to retain payroll records for at least 7 years.

Income Statement and Employee Tax Refunds

The Income Statement helps IRD determine whether an individual has:

• Paid the correct amount of tax
• Overpaid tax and should receive a refund
• Underpaid tax and needs to pay more
• A balanced tax position

Employees can review their Income Statement through myIR. If all information is correct, IRD can usually finalize the assessment without the employee filing a separate return.

However, an individual may still need to file an IR3 return if they have other income, such as business income, rental income, overseas income, or certain untaxed income.

New Zealand Payroll Compliance for Global Employers

International companies hiring in New Zealand must manage more than PAYE. Payroll compliance can involve employment law, tax reporting, employee deductions, leave entitlements, KiwiSaver, ACC, and statutory record keeping.

Key compliance areas include:

• PAYE calculations
• Payday filing
• KiwiSaver administration
• ESCT reporting
• ACC Earners’ Levy
• Student loan deductions
• Child support deductions
• Schedular payments
• Holidays Act compliance
• Employment Relations Act compliance
• Wages Protection Act requirements
• Payroll record retention
• Employee onboarding and tax code management

For companies managing teams across countries, Mercans’ global payroll services provide a centralized way to run compliant payroll while supporting local statutory requirements.

How Mercans Supports New Zealand Payroll

Mercans helps companies manage New Zealand payroll, payday filing, PAYE compliance, and employee reporting through local expertise and global payroll technology.

For businesses hiring in New Zealand without a local company, Mercans’ Employer of Record services provide a compliant hiring solution. Mercans can support employment administration, payroll processing, statutory deductions, and local payroll reporting.

For companies with an existing New Zealand entity, Mercans’ global payroll solutions help manage payroll operations, payday filing data, gross-to-net calculations, and payroll compliance across multiple markets.

Through HR Blizz, Mercans also helps employers centralize employee records, payroll workflows, HR data, approvals, and reporting across countries.

Mercans’ New Zealand payroll support can include:

• New Zealand payroll processing
• PAYE calculation and reporting
• Payday filing support
• IR348 employment information support
• IR346K new employee reporting support
• IR344 correction support
• KiwiSaver administration
• ESCT calculation
• ACC Earners’ Levy configuration
• Student loan deduction handling
• Child support deduction handling
• Tax code management
• Schedular payment support
• Payroll record keeping support
• Holidays Act payroll calculations
• Employer of Record support in New Zealand
• Multi-country payroll reporting

With payroll coverage across more than 160 countries, Mercans helps employers manage New Zealand payroll compliance, reduce filing risk, and support business growth across international markets. Explore Mercans’ payroll and EOR solutions to simplify payday filing, PAYE reporting, and payroll operations in New Zealand.

New Zealand Income Statement FAQs

What is an Income Statement in New Zealand?

An Income Statement is an annual summary generated by IRD showing a person’s income, tax paid, and whether they are due a refund or need to pay more tax.

What is payday filing?

Payday filing is the process where employers submit payroll information to IRD after every payday.

Is payday filing mandatory in New Zealand?

Yes. Payday filing is mandatory for New Zealand employers.

What is the deadline for payday filing?

Electronic payday filing is generally due within 2 working days of payday. Paper filing, where permitted, is generally due within 10 working days.

What is PAYE in New Zealand?

PAYE stands for Pay As You Earn. It is income tax deducted from employees’ wages or salary and paid to IRD by the employer.

Do employees still receive a year-end tax certificate?

Most employees receive an IRD-generated Income Statement rather than a traditional employer-issued annual wage certificate.

What is KiwiSaver?

KiwiSaver is New Zealand’s workplace savings scheme. Employee and employer contributions are reported through payday filing.

What is ESCT?

ESCT is Employer Superannuation Contribution Tax. It applies to employer KiwiSaver and other employer superannuation contributions.

What is the ACC Earners’ Levy?

The ACC Earners’ Levy funds New Zealand’s accident compensation scheme and is generally included in PAYE calculations.

Do salary and wage earners need to file an IR3?

Many salary and wage earners do not need to file an IR3 because IRD automatically prepares an Income Statement. An IR3 may still be needed if the person has business, rental, overseas, or other reportable income.

Can foreign companies hire employees in New Zealand?

Yes. Foreign companies can register and manage local payroll obligations or use an Employer of Record such as Mercans to hire employees without setting up a local entity