NZ PAYE Calculator 2026–27

How PAYE is worked out in 2026–27

PAYE (pay as you earn) is the income tax your employer deducts from every pay, plus the ACC earners' levy, worked out with Inland Revenue's payroll specification for 2026–27. For a main-job code (M or ME) the pay is annualised – multiplied by 52 for weekly, 26 for fortnightly or 12 for monthly – and tax is worked out on that annual figure at 10.5%, 17.5%, 30%, 33%, 39%. The ACC earners' levy of 1.75% is added, the total is divided back to the pay period and the cents are truncated, not rounded.

That is why the PAYE on a pay is not simply your annual tax divided by 26: the annualising method assumes you earn the same amount every pay for the whole year. If you earn $2,500 a fortnight, your employer deducts as if you earn $65,000 a year, even if you only work that job for three months. That single assumption explains most refunds, which the tax refund calculator covers.

A secondary code works differently. There is no annualising at all; the whole pay is taxed at one flat rate, 10.5% to 39%, chosen to match the top rate your total income reaches. The ACC levy is added on top, so a pay on the S code loses 19.25% in total.

PAYE on common fortnightly pays (tax code M, 2026–27)

The table shows what an employer deducts on code M with no student loan or KiwiSaver, calculated with the same formula the calculator uses. Because main-code PAYE is worked out from the annualised pay, a weekly pay of half these amounts carries almost exactly half the PAYE, and a four-weekly pay about double.

Worked example: one fortnightly pay with every deduction

Take a $2,500 fortnightly pay on tax code M. Income tax is $450.78 and the ACC earners' levy is $43.74, so total PAYE is $494.52 and take-home is $2,005.48. On ME – the code for people who qualify for the independent earner tax credit – PAYE drops to $474.52, about $20.00 a fortnight less, because $65,000 sits inside the $24,000–$66,000 band where the full $520 credit applies.

Add a student loan (code M SL) and the default 3.5% KiwiSaver rate, and the same pay loses $188.64 in student loan repayments (12% of the pay over the $928 fortnightly threshold) and $87.50 in KiwiSaver, leaving $1,729.34. KiwiSaver comes off the gross pay but does not reduce the PAYE, because New Zealand taxes employee KiwiSaver contributions before they are deducted.

Compared with 2025–26, the same $2,500 pay on M now carries $2.00 more in ACC levy per fortnight because the levy rose from 1.67% to 1.75% on 1 April 2026. The income tax part is unchanged; the thresholds have stayed the same since 31 July 2024.

Choosing your tax code on the IR330

You choose your own tax code by filling in the Tax code declaration (IR330) for each employer or payer; Inland Revenue's IR330 includes a flowchart on pages 2 and 3. Your highest income source is your main income and gets M or ME; every other source is secondary income. Add SL if you have a student loan, and give a new IR330 whenever things change – a second job, a pay rise into a new band, or paying off your loan.

• M – main or highest-paying job, no independent earner tax credit.
• ME – main job when you expect $24,000 to $70,000 a year and do not get Working for Families, NZ Super or a main benefit.
• SB, S, SH, ST, SA – secondary jobs, picked by your total annual income from all sources ($15,600, $53,500, $78,100 and $180,000 are the cut-offs).
• CAE – casual agricultural work of up to 3 months with no other income, such as shearers and shed-hands.
• NSW – recognised seasonal workers and foreign crew fishing in New Zealand waters.
• EDW – temporary election-day work covering advance voting and election day.
• ND – no declaration: what your employer must use if you do not hand in an IR330, 45% plus the ACC levy.

Secondary tax codes: an example that goes wrong

The right secondary code depends on your combined income, not on how much the second job pays, because your extra earnings sit on top of your main income in the higher tax bands. A common mistake is picking S because the second job is small.

Say you earn $70,000 in your main job and $150 a week from weekend work, $77,800 in total. The correct code is SH; PAYE on each $150 pay is $47.62. On S it would be $28.87, and over a full year the income tax shortfall adds up to about $975 – an end-of-year bill that arrives with your assessment. The reverse mistake, a code that is too high, simply produces a refund.

The 45% no-declaration rate, and when a tailored tax code helps

If you start a job without giving your employer an IR330, they must deduct at the non-declaration rate of 45%, plus the ACC earners' levy. On a $1,200 weekly pay that means $561.00 deducted instead of $231.39 on code M – $329.61 a week of over-deduction. A corrected IR330 fixes it from the next payday; the excess comes back at year end. Employers who file electronically must send your pay details to Inland Revenue within 2 working days of each payday (paper filers have 10 working days), so the tax code used shows up in your myIR income summary almost immediately.

A tailored tax code suits people whose standard code regularly leaves them with a large bill or refund. Inland Revenue lists NZ Super, a second job or other income on top of your main job, a benefit or ACC payments while you are also working, a taxable overseas pension, and business losses from earlier years when you now earn salary or wages. You apply in myIR under 'Tailored tax code application' or on the IR23BS form. Inland Revenue sends a letter and certificate within 10 working days (often longer in February and March), you show it to your employer, and it runs only until 31 March – you must reapply every tax year.

Checking your payslip against the calculator

Enter your gross pay for the period and the frequency and tax code shown on your payslip. If the PAYE matches to within a few cents, your employer is using the standard tables. Larger gaps usually come from:

• A bonus, back pay or holiday pay in the same pay – these are taxed as extra pays with their own method, which this calculator does not model.
• Salary sacrifice or an allowance that changes the taxable gross.
• A tailored tax code, which replaces the standard rates with the rate on your certificate.
• A different pay frequency, such as four-weekly, that you have treated as monthly.