PAYE (Pay As You Earn)
The tax your employer deducts from wages before you are paid — income tax plus the ACC earner’s levy, sent to IRD on your behalf.
PAYE is how most New Zealanders pay income tax without thinking about it. Your employer calculates tax on each payday using your tax code, deducts it along with the ACC earner’s levy, and passes it to Inland Revenue. What lands in your account is your net (take-home) pay.
Because NZ has no general tax-free threshold and taxes each dollar in brackets, the difference between gross salary and take-home pay surprises people — a $70,000 salary does not mean $70,000 arrives in your account. A wrong tax code is the usual culprit when PAYE goes astray; IRD squares it up in the end-of-year assessment.
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