Gross to net Payroll Engine New Zealand

G2N Nova is the exclusive Gross-to-Net Engine for New Zealand, designed to deliver 100% accurate, real-time payroll calculations across New Zealand and 100+ other countries. Built on a unified, native platform, it ensures seamless payroll processing without storing or accessing any employee-identifiable information.

This cutting-edge payroll solution is tailored to meet New Zealand’s strict data privacy standards, keeping all sensitive employee data securely within the client’s systems. Unlike traditional payroll engines, G2N Nova calculates gross-to-net payroll with unmatched speed and precision—without ever needing access to personal data.

Streamline your payroll operations with the most secure and efficient Gross-to-Net Engine in New Zealand. Request a demo today!

---

Gross to net payroll tax engine for New Zealand

Stay ahead of payroll tax changes with G2N’s Payroll Tax Engine New Zealand—a cutting-edge, cloud-based solution that delivers real-time, automatic updates tailored specifically for New Zealand payroll requirements.

• Maintain your existing HCM/ERP/WFM software without switching to an external payroll solution.
• Find a partner offering a plug-and-play solution exclusively for payroll tax updates.

Solutions

• HCM/ERP/WFM Systems: G2N integrates effortlessly with all major HCM, ERP, Time, Pay, and Attendance systems, allowing organizations to continue using their existing infrastructure without disruption.
• System Integrators: G2N enables system integrators to easily add cross-border payroll functionality to their platforms. This simplifies international payroll management while giving integrators full control over the user experience, ensuring tailored and seamless payroll solutions for their clients.
• Enterprises: Streamline your payroll operations with G2N’s unified Tax Engine New Zealand. Say goodbye to payroll complexities and free up valuable time to grow your business, innovate, or finally take that well-earned break!
• SMEs: Built for flexibility and growth, G2N scales effortlessly to accommodate your expanding workforce and evolving compliance needs. From 1 to 120,000 records, G2N ensures accurate real-time gross-to-net payroll processing, making it the perfect solution for small and medium-sized businesses.
• Service Providers: Focus on what matters most to your clients and your business with G2N’s seamless payroll processing platform, trusted by leading Fortune Global 500 companies.

How It Works

Input Collection

• Employee Data: Captures essential details such as salary, benefits, and employment information for accurate payroll processing.
• Leave Management: Tracks employee absences, leave balances, and time-off requests with precision.
• Time & Activity Tracking: Monitors work hours, attendance, and overtime to ensure compliance and accuracy in payroll calculations.

G2N Nova Process

• Regulatory Compliance & Filing: Directly integrates with New Zealand’s statutory authorities for precise tax filings and compliance with payroll regulations.
• Local Compliance Assurance: Our in-house compliance team ensures payroll is processed in strict accordance with New Zealand’s employment laws and tax regulations.
• Global Payroll Engine – Gross to Net Computation: Performs real-time gross-to-net payroll calculations, ensuring accurate wages, deductions, and tax withholdings.

Output

• General Ledger Integration: Generates detailed financial entries for seamless accounting and reconciliation.
• Treasury & Cash Flow Management: Provides real-time treasury reports to optimize financial planning.
• Automated Bank File Generation: Creates secure, compliant bank files for payroll payments and transactions.
• Payslip Delivery: Issues detailed pay slips, clearly outlining wages, deductions, and tax contributions for full transparency.

G2N Nova is designed for scalability, accuracy, and compliance, making payroll processing effortless for businesses of all sizes. With real-time integration and a secure, transparent payroll experience, organizations can streamline operations while ensuring employees are paid accurately and on time.

Features of G2N Payroll Engine New Zealand

Benefits

Streamlined Payroll Processing

G2N Payroll Engine New Zealand simplifies payroll management, delivering fast, accurate, and efficient payroll processing while ensuring compliance with local tax regulations. It features a powerful Salary Calculator New Zealand for precise payroll calculations.

Seamless Inbound and Outbound Integrations

Our platform integrates effortlessly with New Zealand’s payroll and HR systems, enabling smooth data flow, enhancing operational efficiency, and minimizing payroll calculation errors.

Eliminate Manual Data Extraction

G2N automates payroll data extraction, reducing human errors and eliminating manual data entry, ensuring accurate and seamless payroll processing, including with the Salary Calculator New Zealand.

Multi-Country Payroll Capabilities

G2N allows businesses in New Zealand to manage payroll across multiple countries, providing the flexibility to handle complex payroll and tax requirements while maintaining compliance, including local Salary Calculator New Zealand functionalities.

Everything you need to know about gross to net calculation in New Zealand

G2N Payroll Engine New Zealand is designed to handle a wide range of gross-to-net salary calculations across various employee scenarios, including but not limited to:

• New hire on the 1st of the month
• New hire mid-month
• Termination mid-month
• Termination at the end of the month

G2N’s flexibility ensures it can accommodate even the most complex payroll scenarios, delivering accurate and efficient calculations regardless of the timing of employee changes.

Standard Deductions

From 1 August 2024, New Zealand’s PAYE (Pay As You Earn) income tax brackets will be updated as announced in the Budget on 30 May 2024. These adjustments aim to provide tax relief while ensuring a fair contribution from all income levels. Below is the updated tax bracket structure for the 2024-2025 financial year:

2024-2025 PAYE Income Tax Brackets

These revised tax brackets affect how much income tax is deducted from salaries and wages under the PAYE system, impacting take-home pay for employees across New Zealand.

kiwisaver

KiwiSaver is a government-backed savings scheme aimed at helping New Zealanders build financial security for retirement. Both employees and employers contribute a percentage of wages, with automatic deductions making the process seamless.

Employee Contributions

Employees can choose to contribute 3%, 4%, 6%, 8%, or 10% of their gross earnings. If they don’t select a rate, the default deduction is 3%.

Employer Contributions

Employers must contribute a minimum of 3% of an employee’s gross wages. This contribution is in addition to the employee’s total pay, covering:

• Bonuses
• Commissions
• Overtime
• Gratuities or extra salary payments
• Before-tax payments like ACC compensation or paid parental leave

To simplify payroll processing, KiwiSaver calculations are integrated into Inland Revenue’s PAYE system.

Student Loan Repayments

In New Zealand, student loan repayments are deducted automatically from an employee’s wages or salary, ensuring structured and consistent repayment. The repayment rate and threshold are determined by Inland Revenue (IRD), and deductions are based on gross taxable income.

How Student Loan Repayments Work

From 1 August 2024, the repayment threshold will be $22,828 per year. Employees earning above this threshold will have 12% deducted from their income over this amount. The repayment threshold varies depending on pay frequency:

2024/25 Student Loan Repayment Thresholds

For instance, if an employee earns $850 per week, their student loan deduction would be:

• $850 – $439 = $411
• $411 × 12% = $49.32

Since repayments are based on whole dollars only, cents are not included in the calculation.

If an employee’s earnings are $970.50 per week, the deduction is:

• $970 – $439 = $531
• $531 × 12% = $63.72

Student Loan Deductions for Multiple Payments in One Pay Period

If the Threshold Was Applied in the Original Pay Run

If an employee has already met the repayment threshold in their first payment of the period, any additional income will have the full 12% deducted.

For example, if an employee receives a monthly salary of $2,700, the student loan repayment would be:

• $2,700 – $1,902.33 = $797.67
  $797 × 12% = $95 (rounded to whole dollars)

If they later receive an additional payment of $1,200, the entire amount will be subject to repayment:

• $1,200 × 12% = $144

If the Threshold Was Not Applied in the First Pay Run

If an employee’s first payment is below the repayment threshold, no deduction is made. However, if an additional payment raises their total earnings over the threshold, then the combined amount is used to determine the student loan repayment.

Example

• First paycheck: Employee earns $350—no repayment required.
• Second paycheck: Employee earns another $350, bringing total earnings to $700.
• Calculation:
  $700 – $439 = $261
  $261 × 12% = $31.32

Important: The pay period date, not the payment date, determines whether the repayment threshold applies.

Student Loan Repayments for Secondary Employment

For employees earning secondary income, the repayment threshold does not apply—they must repay 12% on every dollar earned from their second job.

For instance, if an employee’s second job pays $750 per week, the student loan repayment is calculated as:

• $750 × 12% = $90

Employers must ensure correct deductions to help employees stay on track with their student loan obligations while complying with IRD regulations.

ACC Levies – Accident Compensation Corporation:

The Accident Compensation Corporation (ACC) provides financial and medical support for people injured in accidents across New Zealand. To fund this system, everyone who earns income—whether as an employee, self-employed individual, or business owner—must pay ACC levies. These levies are reviewed every three years and vary based on income type and employment status.

Who Pays ACC Levies?

Employees and Self-Employed Individuals – Earner’s Levy

The Earner’s Levy is charged to all employees and self-employed individuals to cover injuries that happen outside of work, such as sports accidents or falls at home.

• Employees: The levy is deducted directly from wages or salaries by the employer through PAYE.
• Self-Employed & Shareholder-Employees: These individuals must pay the levy themselves, and ACC will send an invoice after they file their tax return.

The Earner’s Levy is calculated as a percentage of income, up to a capped earnings threshold.

Earner’s Levy Rates (Including GST)

Maximum Earnings for Earner’s Levy

Employers & Self-Employed Individuals – Work Levy

The Work Levy covers injuries that occur in the workplace or while working. This applies to:

• Employers (who pay levies for their staff)
• Self-Employed Individuals & Shareholder-Employees

ACC determines the Work Levy rate based on industry risk and claims history. Higher-risk industries (e.g., construction) will have higher levy rates than lower-risk industries (e.g., office work). ACC invoices businesses annually based on income and filed tax returns.

Working Safer Levy – Supporting Workplace Safety

The Working Safer Levy funds WorkSafe New Zealand’s health and safety initiatives to reduce workplace injuries.

• Applies to self-employed individuals, shareholder-employees, and employers
• Charged at a flat rate based on income
• Included in the annual ACC invoice

Why Are ACC Levies Important?

ACC levies ensure everyone in New Zealand has access to accident-related healthcare and income support. By contributing through wages, salaries, or business income, individuals and businesses help fund rehabilitation, treatment, and injury prevention programs nationwide.

Hours of Work

Managing payroll in New Zealand involves accurately calculating payments for partial work periods, overtime, and public holidays. Here’s how these factors impact wages:

Proration: Calculating Partial Payments

When an employee works only part of a pay period—due to starting or leaving mid-cycle, unpaid leave, or reduced hours—their wages must be prorated.

Overtime: Pay for Extra Working Hours

Employees working beyond their contracted hours may be eligible for overtime pay, depending on their employment agreement.

Holiday Pay & Holiday Pay Rate

Employees working on a public holiday are entitled to additional compensation.

Understanding these payroll components ensures compliance with New Zealand’s labor laws while maintaining fair employee compensation. 

Independent Earner Tax Credit (IETC) 

The Independent Earner Tax Credit (IETC) is a tax incentive for salary and wage earners who do not receive other government benefits or tax credits. It helps reduce the amount of income tax paid each year.

Eligibility for IETC

• Available to individuals earning within a specific income band
• Not available to those receiving Working for Families Tax Credits, student allowances, or other state assistance

IETC Income Thresholds

Example Calculation

• If an individual earns $30,000 per year, they qualify for the full $520 credit
• If they earn $46,000, their IETC is reduced by: (46,000−44,000)×0.13=260(46,000 – 44,000) \times 0.13 = 260(46,000−44,000)×0.13=260 Final IETC = $520 – $260 = $260 per year

IETC is automatically applied when PAYE is deducted, but individuals must ensure they meet the eligibility criteria to receive it.

Payroll Giving

Payroll Giving allows you to donate to registered charities directly from your paycheck through your payroll provider. Tax credits are applied automatically during the pay run, eliminating the need to claim a rebate at the end of the tax year.

Payments

Apart from income tax and KiwiSaver contributions, employees may have additional deductions taken from their wages. These deductions can be mandatory (required by law) or voluntary (agreed upon by the employee).

Mandatory Deductions

These are payments that employers must deduct if they receive instructions from the relevant authorities.

Child Support

• If an employee is liable for child support payments, Inland Revenue (IRD) will notify the employer.
• The employer must deduct the specified amount from the employee’s pay and transfer it to IRD.

Court Fines

• If an employee has unpaid court fines, the Ministry of Justice may issue an attachment order.
• Employers are legally required to deduct the stated amount from wages and send it directly to the authorities.

Voluntary Deductions

These deductions are made with the employee’s consent and can include:

Social Club Contributions

• Employees may opt to contribute to workplace social clubs for events, gifts, or team activities.

Union Fees

• If an employee belongs to a union, they may authorize their employer to deduct membership fees directly from their pay.

Insurance Schemes

• Employees may enroll in workplace insurance schemes, such as health or income protection insurance, with payments deducted automatically.