PayHero Tax Update FY2026

This update applies the new tax specifications for any pays with a pay date falling in the April 1st 2025 - March 31st 2026 tax period, as detailed below.

ACC Earners' Levy

The ACC Earners' Levy increases from $1.60 to $1.67 per $100 earned. 

Remember, the Earners' Levy is calculated as part of standard PAYE tax, so this change means you'll see a slight change in the PAYE tax calculations for all employees from your first pay with a pay date in April.

The maximum liable earnings threshold also increases from $142,283 to $152,790.

ESCT Thresholds

The thresholds for Employer Superannuation Contributions Tax (ESCT) increase, as detailed here:

Note that PayHero automatically assesses the appropriate ESCT rate for your employees in April each year - learn more here: Employer Superannuation Contribution Tax (ESCT)

Minimum Wage

The minimum wage rate increases from $23.15 to $23.50.

This change only automatically applies to Minimum Wage Top Up calculations. 

If you have employees who are currently on minimum wage and need to have their rate updated, there are two approaches, depending on whether or not 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.

Final Pay Tax Calculations

Tax rates for lump sum payments in a final pay will be calculated slightly differently.

Lump sum payments are usually taxed based on an employee’s last 4 weeks of earnings. However, it’s common for final pays to occur outside of an employee’s normal pay cycle.

To accommodate this, IRD now specifies that lump sum tax in a final pay should be based on the last two pay periods the employee received payment for.

Note - this change will be added to PayHero in the week ending March 23rd, while all other changes above have been applied from the week ending March 16th.