NZ tax year-end 2026: everything payroll teams need to know

The New Zealand tax year runs from 1 April to 31 March. As 31 March 2026 approaches, payroll teams need to be across a handful of legislative changes, confirm a few key settings, and ensure the year closes cleanly. This guide covers everything – from what happens automatically to what needs a manual check – so you can head into April with confidence.

How tax year-end works in NZ payroll

Since the introduction of Pay Day Filing, the end-of-year payroll process has become significantly simpler. Payroll information – gross earnings, PAYE, ESCT, KiwiSaver contributions and deductions – is submitted to Inland Revenue with every pay run throughout the year. This means reconciliation happens continuously, rather than in a single year-end event.

The practical result: traditional end-of-year IRD reconciliation reports are no longer mandatory. The tax year simply transitions when the first pay run with a Pay Day on or after 1 April 2026 is processed.

What changes on 1 April 2026

ACC Earners' Levy

The ACC Earners' Levy is deducted from employee earnings as part of PAYE. The rate changes annually and must be loaded in your payroll system before your first April pay run.

The 2025–2026 rate (current year) is shown below for reference. The 2026–2027 rate should be confirmed with ACC before 1 April.

To confirm your updated rate, contact ACC:

• Phone: 0800 222 776
• Alternative: 07 859 8675

If you use payroll software, check whether your system updates this rate automatically.

KiwiSaver: default contribution rates increasing

From 1 April 2026, the default KiwiSaver contribution rates for both employees and employers increase from 3% to 3.5%. This is a legislated change.

Key points for payroll teams:

• Employees who remain on the default rate will automatically move to 3.5%. Payroll systems should reflect this from the first pay run on or after 1 April 2026.
• Employees who wish to maintain a 3% contribution can elect a reduced rate from 1 February 2026, valid for a period of 3 to 12 months.
• Employer contributions will also increase to 3.5% at default. Review any employees on minimum-match arrangements.
• 16- and 17-year-old employees become eligible for employer KiwiSaver contributions from 1 April 2026.

Minimum wage

The adult minimum wage increases to $24.50 per hour from 1 April 2026 (up from $23.50). The starting-out and training minimum wage increases to $19.60 per hour (80% of the adult rate).

Review all employees paid at or near the current minimum wage and update their rates before processing your first April pay run.

What's not changing

ESCT (Employer Superannuation Contribution Tax)

ESCT is the tax withheld from an employer's KiwiSaver contributions. The rate for each employee is based on their total earnings (salary plus employer contributions) from the prior tax year. It is a flat rate per employee – not tiered – applied to the employer contribution each payday.

ESCT thresholds were updated on 1 April 2025 to align with the revised personal income tax brackets. The thresholds are unchanged for 2026–2027; the rates below continue to apply.

At the start of each tax year, you should review and update ESCT rates for all employees based on their prior-year earnings. For new employees, use an estimate of their expected annual income.

PAYE tax brackets

No changes to personal income tax brackets have been announced for the 2026–2027 tax year. The thresholds introduced in the 2024 Budget, which took full effect from 1 April 2025, continue to apply:

Student loan repayments

There are no changes to student loan repayment thresholds for the 2026–2027 tax year. Employers must continue to deduct student loan repayments from employees with a tax code ending in SL, at a rate of 12% per dollar earned above the repayment threshold. This applies to tax codes M SL and ME SL.

Optional year-end reports

Although mandatory end-of-year reconciliation is no longer required under Pay Day Filing, many payroll teams run reconciliation reports as a matter of good practice – particularly for audit purposes or to satisfy internal finance requirements.

Prior-year adjustments

Any corrections or adjustments relating to the 2025–2026 tax year must be processed before the first pay run of the new tax year is finalised. Once the first April pay run is complete, prior-year adjustments may need to be handled differently. Check your payroll system's guidance on processing late adjustments.

Key dates summary

A quick note on payroll software

Modern payroll software should handle most of the mechanics of tax year-end automatically – transitioning tax tables, updating levies, and resetting year-to-date figures. The main actions that typically remain with the payroll team are confirming the ACC rate, updating minimum wage employees, and communicating the KiwiSaver changes to staff.

If you're processing payroll manually or with software that requires manual updates, allow additional time before 1 April to review and update all affected settings.