Understanding Your NZ Pay Slip
Your pay slip can look confusing with all those numbers and codes. But it doesn't have to be. Here's a simple guide to what each part means.
PayDay Team
13 January 2026
Quick Summary
- • Gross pay = Your full earnings before deductions
- • Net pay = What you actually get in your bank
- • Main deductions: PAYE tax, KiwiSaver, ACC levy, student loan
- • Always check your pay slip for mistakes
When you get your pay slip, you might just look at the final number. But knowing what each line means helps you understand your money better. Let's break it down.
The Top Part: Your Earnings
Gross Pay
This is the full amount you earned before anything is taken out. If you're on a salary, it's your yearly pay divided by how many pay periods there are. If you're paid hourly, it's your hours times your hourly rate.
Example:
- Hourly rate: $28.00
- Hours worked: 80 (two weeks)
- Gross pay: $2,240.00
Other Earnings
You might see extra lines for things like:
- Overtime - Pay for extra hours (often at 1.5x your normal rate)
- Holiday pay - Pay for public holidays or annual leave
- Allowances - Extra pay for things like travel or working shifts
- Bonus - One-off extra payments
The Middle Part: Deductions
Deductions are amounts taken from your gross pay. Some are required by law. Others you might have chosen.
PAYE Tax
What is PAYE?
PAYE stands for Pay As You Earn. It's income tax that your employer takes from your pay and sends to IRD on your behalf. The rate depends on how much you earn.
Here are the current PAYE tax rates in NZ (2025-2026):
| Income | Tax Rate |
|---|---|
| $0 - $14,000 | 10.5% |
| $14,001 - $48,000 | 17.5% |
| $48,001 - $70,000 | 30% |
| $70,001 - $180,000 | 33% |
| Over $180,000 | 39% |
KiwiSaver
If you're in KiwiSaver, your contribution comes out of your pay. You choose how much to put in - 3%, 4%, 6%, 8%, or 10% of your gross pay. Your employer must also put in at least 3%.
On your pay slip, you'll see your contribution amount. The employer contribution might show separately or not at all - it goes straight to your KiwiSaver fund.
ACC Levy
ACC (Accident Compensation Corporation) provides cover if you get hurt. Everyone pays a small amount - about 1.6% of your pay, up to a cap. This appears as "ACC Earners' Levy" on your pay slip.
Student Loan
If you have a student loan and earn over the threshold ($24,128 per year as of 2026), 12% of everything you earn above that amount goes towards your loan.
Example:
If you earn $50,000 per year, you're $25,872 over the threshold. You'll repay 12% of that - about $3,105 per year, or roughly $119 per fortnight.
Other Deductions
You might see other things taken out, like:
- Union fees - If you belong to a union
- Health insurance - If your employer offers a scheme
- Superannuation - Extra retirement savings
- Salary sacrifice - Pre-tax benefits you've chosen
The Bottom Part: Net Pay
Net pay is the amount that actually goes into your bank account. It's what's left after all deductions are taken out.
This is the number you should use when working out your budget. It's your real, spendable income.
A Complete Pay Slip Example
What to Do With This Knowledge
Now that you understand your pay slip, you can:
- Check for mistakes - Make sure your hours and rates are right
- Budget properly - Use your net pay for planning, not gross
- Understand your tax code - Make sure it's correct (usually "M" for main job)
- Review your KiwiSaver - Consider if your contribution rate is right for you
Make Your Net Pay Work Harder
Once you know your take-home pay, you can split it automatically. PayDay divides your net pay across your accounts the moment it arrives - so your bills, savings, and spending are all sorted without you having to think about it.
Join the WaitlistFinal Thoughts
Your pay slip tells an important story about your money. It shows exactly what you earned, where it went, and what you have to work with.
Take a few minutes to look at your next pay slip. Check that everything looks right. And if something seems off, ask your payroll team - mistakes do happen.
Understanding your pay slip is the first step to taking control of your finances. Once you know what you're working with, you can make a plan for it.
Frequently Asked Questions
What is PAYE tax in New Zealand?
PAYE stands for Pay As You Earn. It's the income tax your employer takes from your pay and sends to IRD. The amount depends on how much you earn - the more you earn, the higher the rate.
Why is my KiwiSaver taken from my pay?
If you're enrolled in KiwiSaver, your contributions come straight from your pay before you get it. You can choose to put in 3%, 4%, 6%, 8%, or 10% of your gross pay. Your employer also adds at least 3%.
What is ACC and why do I pay it?
ACC (Accident Compensation Corporation) provides cover if you get hurt. The ACC levy is a small amount taken from your pay. It's about 1.6% of your earnings up to a cap. This helps pay for accident cover for all New Zealanders.
What's the difference between gross and net pay?
Gross pay is the full amount before anything is taken out. Net pay (also called take-home pay) is what actually goes into your bank account after tax, KiwiSaver, and other deductions.