This update applies the new tax specifications for any pays with a pay date falling in the April 1st 2026 - March 31st 2027 tax period, as detailed below.
These release notes detail only the changes occurring in PayHero. For an overview of all EOFY tax changes that may affect you, check out our blog post.
Check out the yellow callouts in each section for a quick summary of what the change means for you.
ACC Earners' Levy
The ACC Earners' Levy increases from $1.67 to $1.75 per $100 earned for any pays created with a pay date on or after April 1st. The maximum liable earnings threshold also increases from $142,283 to $152,790.
You'll see a slight change in the tax calculations for all employees, resulting in slightly lower take home pay.
If you have automatic payments set up, be sure to change these (or explore one of our payment methods to streamline your payment processing).
KiwiSaver Minimum Rate Changes
The default KiwiSaver contribution rate is increasing from 3% to 3.5%. This applies to both employee and employer contributions.
Employees can apply to IRD for a temporary rate reduction if they wish to continue contributing at 3% for now.
Contribution rates will be automatically updated to 3.5% when each employee is added to their first April (or later) pay in PayHero. This applies to any employee and employer contributions which are currently set to 3%.
If an employee gives you a temporary rate reduction certificate, you need to specify this in PayHero before creating the pay.
Jump into these FAQs for the ins-and-outs of how it all works:
How do I handle employees who have applied for a temporary rate reduction?
How do I handle employees who have applied for a temporary rate reduction?
If an employee provides you with an exemption certificate or IRD contacts you to note that an employee should still be on 3%, you'll need to:
Head to People > Employees and navigate to the employee's Employment tab.
Set the KiwiSaver Employer Contribution field to 3% (Exemption).
If the KiwiSaver Employer Rate had already been updated to 3.5%, click the padlock to unlock the rate and set it to 3% as well.
Does the change apply to the whole pay period?
Does the change apply to the whole pay period?
Yes, unlike minimum wage changes, tax and KiwiSaver changes apply to the full pay period, based on the tax period the pay falls in. The tax period is determined by the pay date, so any pays dated April 1st or later are subject to the new rates.
What happens for salary sacrifice?
What happens for salary sacrifice?
Employees who have Salary Sacrifice / Total Remuneration set up in PayHero will also have the salary sacrifice rate automatically updated to 3.5%.
Are employees who are already on higher rates affected?
Are employees who are already on higher rates affected?
No, employee and employer contributions that are already higher than 3% are not affected by these changes.
Can I set an employee to 3.5% before April 1st?
Can I set an employee to 3.5% before April 1st?
No. The 3.5% option will only become available to select after April 1st.
However, you can simply set the employee to 3% (not '3% Exemption') and PayHero will automatically update them to 3.5%
Minimum Wage
The minimum wage rate increases from $23.50 to $23.95.
This change automatically applies to Minimum Wage Top Up calculations, but individual employee rate updates need to be applied by an administrator.
If you have employees who are currently on minimum wage, you'll need to update their pay rates.
There are two approaches for updating employee pay rates, depending on whether they are recording timesheets in PayHero. Learn more here: Changing Pay Rates
If you have a large number of employees on minimum wage, we can update their rates in bulk. Contact support@payhero.co.nz for more info.
Additional Updates
In addition to the tax changes detailed above, this release includes a few extras:
Salary Sacrifice - Salary sacrifice will now automatically match the Employer Contribution Rate for each employee, rather than defaulting to 3%.
Insights - The following fields have been added to the 'Employee' table in Insights, to help improve reporting on employee KiwiSaver statuses:
KiwiSaver Employer Rate
KiwiSaver Enrolment Date
KiwiSaver Opt Out Date
KiwiSaver Pre-Existing Member
KiwiSaver Savings Suspension
KiwiSaver Rate Exemption
IRD Number Validation - Validation rules have been updated to support IRD's upcoming release of a larger range of IRD numbers.
Xero Integration - Companies that have had no integration activity with Xero for 55 days will now have their integration automatically disconnected. This change is to comply with Xero's new security requirements.
Speed & Security Updates - General improvements and updates under the hood, particularly around the Payroll > Review page, and document storage.
Payday Filing - Fixed an issue resulting in false payday filing warnings when sending large pays.