Retiring and Redundancy Payments

PayHero includes default Retirement and Redundancy Pay Items, which can be used to pay out an employee's entitlements where applicable.

You can find more general information on creating Final Pays in our support article: Final Pay

A retiring employee may have an entitlement to retirement pay. The retirement payment accrues 8% Holiday Pay, which will also be paid out in the Final Pay, and is subject to KiwiSaver contributions. The rate the retirement payment is taxed at will be slightly lower than normal, since the payment is exempt from the ACC Earners Levy.

Find more information on this here: Government NZ - Retirement

Once you have created the Final Pay for your employee, click the green plus icon. Select the Retirement Payment Pay Item to add it to the pay.

You can then specify the required amount in the blank field.

An employee who has been made redundant may have an entitlement to redundancy pay. The redundancy payment is exempt from accruing 8% Holiday Pay and does not have KiwiSaver contributions applied. Similar to retiring payments, the rate at which the redundancy payment is taxed will be slightly lower since the payment is exempt from the ACC Earners Levy.

You can find more information on this here: Employment NZ - Redundancy.

Once you have created the Final Pay for your employee, click the green plus icon. Select the Redundancy Payment Pay Item to add it to the pay.

You can then specify the required amount in the blank field.