This guide explains New Zealand payroll requirements and how to use the country-specific settings in SmoothPay. It covers tax, KiwiSaver, payday filing, pay-code classifications, piece workers, leave calculations, public holidays, closedowns, final pays, reporting and bringing existing payroll records into SmoothPay.

Use the employee's current declarations, employment agreement and any Inland Revenue instructions when setting up their record. Accurate work patterns, earnings classifications, leave balances and pay history are essential to the calculations.

The leave instructions describe the Holidays Act rules applying in September 2026. The Employment Leave Act introduces a different framework from the first pay period starting on or after 6 August 2028. Continue using the current rules until then. See Employment New Zealand's information about the 2028 changes.

Inland Revenue (IRD) administers PAYE, student loan deductions, child support and the collection of KiwiSaver contributions. The employee's declaration or IRD notice establishes the treatment to use; a setting should not be changed simply to make an unexpected deduction look different.

Obtain the employee's IR330 tax code declaration before preparing their pay. For schedular payments, use the applicable IR330C and any IRD instructions.

Use an SL tax code where required by the declaration. Do not use a flat-rate variation as a substitute for the correct tax code. Where a valid declaration has not been supplied, apply IRD's non-notified treatment. See IRD's information about deductions from income.

Not every independent contractor is subject to the same withholding treatment. Establish whether the payment is a schedular payment and use the relevant declaration. See Independent contractors and IRD's schedular payment instructions.

Use the dedicated Child support — Amount per pay period field in the employee's Tax settings. Child support must not be set up as an ordinary recurring deduction.

For example, a notice requiring $50 per week corresponds to $100 for a fortnightly pay. SmoothPay applies the deduction limit when earnings are low. IRD's protected-net-earnings rule normally limits child support to 40% of net earnings after tax; follow IRD's instructions where the full amount cannot be deducted. That limit is specific to child support. IRD deduction guidance.

Child support appears separately on the payslip. It is included in the deductions liability paid to IRD and in the IRD schedule total; it is not merged into the employee's payslip PAYE line.

Use SLCIR when IRD instructs the employer to collect extra student loan repayments. These are additional to the normal student loan calculation.

The amount beside Pay off $ is the total to recover, not the deduction from each pay. The rate and basis determine each pay's additional deduction. With a fixed total specified, deductions stop when that total has been collected.

The commonly used 5% above threshold setup is not a universal instruction. Primary and secondary income can require different threshold treatment. Follow the actual notice. IRD: student loan underpayments.

Use SLBOR when the employee asks for additional repayments.

For example, to collect an extra $600 at $50 per pay, enter $600 as the total and $50 using the dollar-amount-per-pay basis. Selecting a rate basis does not itself establish a total limit; Pay off $ controls whether collection stops at a specified total.

Flat Student Loan rate changes the ordinary deduction. It is separate from SLCIR and SLBOR, which add repayments. Use the variation authorised by IRD for the employee's SL tax code.

The default gross-basis wording does not override the normal calculation while no flat rate has been entered. Ordinary student loan treatment continues in that case. See IRD's special deduction rate guidance.

Extra Pay tax elective defaults to Automatic, which uses the normal extra-pay calculation. An employee can elect Low, Medium, High or Super high to establish a minimum rate. If the normal calculation produces a higher rate, that higher rate still applies.

To record an election, open the employee's Tax tab, click the Edit button, choose the applicable Extra Pay tax elective, and Save. Retain the employee's instruction and check the deduction when preparing a lump-sum payment.

This can be useful where variable earnings or regular lump sums have led the employee to request higher withholding. It does not guarantee that they will have no end-of-year tax to pay.

Use the appropriate IRD method when checking a calculation. An ordinary extra payment and an end-of-employment lump sum use different earnings look-backs:

The employee's KiwiSaver tab is the New Zealand contribution setup. Check membership, enrolment obligations, the employee's chosen rate and any approved suspension or reduction before preparing the pay.

From 1 April 2026, the default employee rate and minimum compulsory employer rate are 3.5%, subject to the applicable exceptions. The change applies by payday, including a pay period spanning 1 April. Employees already contributing at a higher rate retain their chosen rate. A further default-rate increase to 4% is scheduled for 1 April 2028. IRD: KiwiSaver changes.

Enrolled in KiwiSaver is initially unselected on a new employee record. While it is unselected, SmoothPay does not calculate KiwiSaver contributions, regardless of the percentages entered. Complete the setting according to the employee's actual position and the employer's enrolment obligations.

Eligible new employees aged 18 to under 65 are generally subject to automatic enrolment. Employees under 18 join through a provider. From April 2026, qualifying KiwiSaver members aged 16 and 17 can receive compulsory employer contributions; this does not change the automatic-enrolment starting age to 16. Refer to IRD's automatic-enrolment rules and joining KiwiSaver.

SmoothPay labels this option KiwiSaver holiday. Use the applicable approved suspension information when changing it.

KiwiSaver holiday stops both employee and employer contributions unless the continuation option is selected. Keep the suspension period under review and resume the required deductions and contributions when it ends. See IRD's guidance on suspending contributions.

An employee can obtain IRD approval to contribute at 3% for an approved period of between 3 and 12 months. The employer can choose whether to match that reduction or maintain a higher contribution. Keep the approval and its expiry date. IRD: temporary rate reduction.

Under the current 3.5% default, clearing the checkbox returns reduced rates to 3.5%. Check any higher agreed or elected rate as well. The approval's expiry must be managed by the user; the checkbox is not an automatic expiry schedule.

Select Salary Sacrifice only for an applicable agreed remuneration arrangement in which the employer contribution is included within the employee's remuneration package. Employer contributions must not reduce the employee's pay below the applicable minimum wage. See IRD's employer contribution guidance.

To apply the arrangement, open the employee's KiwiSaver tab, click the Edit button, select Salary Sacrifice, and Save. Check the resulting sacrifice, employee contribution, employer contribution and tax on the prepared payslip.

SmoothPay funds the employer contribution through a pre-tax sacrifice from the agreed remuneration. The employee contribution remains a separate deduction. Salary Sacrifice does not remove ESCT.

For example, the following prepared pays demonstrate the distinction at 3.5%:

The example employer contributions are both subject to 17.5% ESCT. That is the example's ESCT rate, not a rate to enter for every employee.

Pay own tax on CEC changes how compulsory employer contributions are taxed. It requires agreement between employer and employee to use PAYE treatment. Retain that agreement. IRD: deducting tax on employer contributions under PAYE.

Select Pay own tax on CEC in the employee's editable Tax or KiwiSaver settings, then Save and review the pay. SmoothPay pays the full employer contribution to the fund and deducts the associated additional PAYE from the employee's pay instead of deducting ESCT from that contribution.

This is separate from Salary Sacrifice. One controls the agreed funding arrangement; the other controls the tax treatment. If IRD queries an unusual-looking contribution or tax amount, check the calculation and provide the relevant agreement and explanation.

SmoothPay sends employment information directly to IRD when a pay process is completed and authorisation is active. Electronic employment information must normally be filed within two working days of payday. Filing employment information and paying the deductions are separate obligations. IRD: payday filing.

Before completing the first pay:

If the myIR tab does not appear, check the browser's blocked-pop-up indicator and allow the authorisation tab to open. Complete the myIR process before assuming filing is active.

Authorisation may need to be renewed later. The sign-in and authorisation process is the same in principle; an earlier successful filing does not establish that every later pay was received.

For the shared pay-completion procedure, see The pay process.

The filing receipt should arrive shortly after the pay is completed. Check its result and retain it with the payroll records. A receipt requiring attention needs to be resolved; the arrival of an email alone is not a reason to disregard its contents.

If no receipt arrives:

Lost authorisation is a common cause of missing receipts. Batch colours provide an additional check:

Continue checking each receipt. A submission key confirms the submission response, not the accuracy of every payroll input or payment of the deductions.

Use this for a submission that needs resending. It is not normally necessary merely because another batch was completed on the same payday.

When you restore and reprocess a pay to correct it, SmoothPay automatically sends the revised information for that payday. Where several pay processes share the same payday, the submission aggregates the current payroll data for that date.

Complete the corrected pay and check its receipt. Do not send a separate correction merely to account for an additional batch on the same date when the normal automatic update has succeeded.

Changing the payday and reprocessing sends information for the new date. The original date's submission remains at IRD until it is corrected or voided.

For that original date, SmoothPay checks the payroll data now held. If data remains, it replaces the submission with the current information. If no data remains, it voids the old submission. This preserves any other valid pays still belonging to that date.

Use this option where several corrected or moved paydays affect the same month.

SmoothPay checks every date in the selected month. It submits the current data where payroll data exists and voids old submissions for dates with no remaining payroll data. It does not only check dates still listed in current payroll history.

If corrections affect original dates in more than one month, account for each affected month or use the specific-date option for the individual old dates.

Contact SmoothPay Support if you are unsure which submissions need correcting.

Use the IR345 Payment Schedule to review the amount due for the relevant payment period. Producing the schedule does not pay IRD.

Payment frequency depends on the employer's annual PAYE and ESCT liability. Employers below $500,000 generally pay monthly; employers at $500,000 or more pay twice monthly. Monthly deductions are generally due on the 20th of the following month. For twice-monthly payments, the first half is generally due on the 20th of that month and the second half on the 5th of the next month, with the December second-half payment due on 15 January. Check the applicable dates with IRD's payment guidance and employer obligations.

The schedule brings together PAYE, student loan and child support deductions, employee and employer KiwiSaver amounts, and ESCT as applicable. A whole-month report and a half-month report cover different payment amounts; choose the period matching the payment being made.

A code's Classification determines how SmoothPay treats the payment. Its name identifies it on screens and reports; renaming a code does not change its classification. Its Calculation determines how the amount is worked out. For example, an allowance calculated as Units x Rate can still have a different tax and leave treatment from another allowance using that same calculation.

Taxable earnings, earnings included in KiwiSaver and earnings used for leave calculations are separate bases. In classification help, Accruing means the payment contributes to the relevant Holidays Act earnings calculations; it does not mean the transaction itself adds leave entitlement. Non-accruing does not mean non-taxable. Ordinary weekly pay and relevant daily pay also have their own inclusion rules.

Some classifications are reserved for system-generated payments. Review those through their original codes. Use the relevant holiday-pay, cash-up, closedown or termination workflow to generate the payment. Selecting a protected classification on another code is rejected.

For the shared creation and editing steps, see Creating Work codes, Creating Allowance codes and Codes screen overview.

Work codes pay units at a rate and the code's Multiplier. All four classifications are taxable and support KiwiSaver calculations, subject to the employee's circumstances and the applicable contribution rules.

The Work code also has controls for Counts towards TOIL/flexi-time and Include in KiwiSaver calculations. Review these independently of its multiplier.

ACC compensation has particular KiwiSaver rules. A code being included in employee KiwiSaver calculations does not, by itself, establish a compulsory employer contribution. Check the arrangement and IRD's guidance for employees with special circumstances.

Choose the classification that matches the actual payment. The tables describe SmoothPay's classification treatment; the employment agreement and applicable tax rules determine whether that classification is appropriate.

These ordinary taxable classifications are accruing for Holidays Act purposes and included in KiwiSaver calculations where applicable:

The following classifications distinguish extra pay and termination-related amounts:

A bonus is not excluded from Holidays Act gross earnings merely because the employer calls it discretionary or can vary its amount. Establish whether the employer is required to make the payment under the employment arrangement. Employment NZ: calculating holiday and leave pay.

Retirement and redundancy must remain separate: IRD's dedicated guidance confirms the different KiwiSaver treatment, including employer contributions on retirement allowances where the employee is eligible. Both payments are exempt from ACC earners' levy. IRD: redundancy payments and retirement allowances.

SmoothPay's redundancy classification is accruing. Employment NZ identifies uncertainty over whether redundancy compensation must form part of Holidays Act gross earnings and recommends including it to minimise compliance risk or obtaining advice before excluding it. The software's inclusion is not a statement that every redundancy arrangement has the same legal treatment. Employment NZ: calculating holiday and leave pay.

Reimbursements and benefits have different treatment again:

A genuine employment-expense reimbursement can be non-taxable, while an excess or another allowance may be taxable. Non-cash benefits also differ: do not assume that accommodation, a vehicle and a cash allowance all have the same treatment. Establish the applicable treatment before choosing the code. IRD: allowances.

The termination calculation includes the positive entitled annual-leave payout in the percentage holiday-pay base. The cash-up code's non-accruing classification does not remove that specific final-pay calculation step. Review the saved final-pay note for the actual earnings base.

Allowance calculation choices include Amount per pay period, Units x Rate, Time x Rate and Earnings x Rate. An earnings-based allowance also needs the correct earnings selection; do not assume that every pay component belongs in its base.

Depending on the classification, the screen also shows controls such as Include in KiwiSaver calculations, Exclude from leave valuation, Spread costs automatically, Shift work indicator and Payslip YTD?. These control different aspects of the payment. Cost spreading does not determine tax treatment, and a payslip display setting does not determine whether the amount forms part of leave earnings.

Use the established system codes for generated leave payments. If an existing payment's treatment needs to change, check its classification and any available inclusion controls before changing future pay entries; a renamed code does not correct completed pay history.

Leave codes identify the payment and the balance to use or accrue. Use or accrue can offer No entitlement, Weeks, Days, Hours or Percentage per pay, depending on the code. New Zealand annual-leave entitlement is maintained in weeks.

Leave payments are taxable and support KiwiSaver calculations where applicable. The code's entitlement, accrual and reporting settings are separate from an employee's individual entitlement. SmoothPay prevents duplication of certain existing leave classifications; tailor the employee's leave settings where their entitlement differs.

Review the relevant accrual rate, cap, Auto-balance, Leave without pay and payslip-balance settings where present. A code does not determine an employee's legal eligibility merely because it permits entry of a payment. See the shared Codes screen related processes for code setup and the leave sections below for the NZ workflows.

Agency classifications are used for deductions and payments to other parties. The usable choices are:

Savings and Loans remain visible in the classification menu but are deprecated and cannot be selected for a new setup.

For qualifying payroll giving, the donation tax credit reduces PAYE in the pay in which the donation is made. It requires an approved recipient and the applicable electronic filing arrangements. Confirm the deduction and credit in the prepared pay rather than treating an ordinary charitable deduction as automatically eligible. IRD: payroll giving.

An agency's Calculation is separate from its classification. Choices include per-pay or fixed amounts, time- or earnings-based calculations, the balance of net pay, and specific Tax Arrears, Court Fines, WINZ Payments and Other govt agency methods. Apply the actual deduction authority or notice. Child support and the student-loan controls described earlier use their dedicated NZ setup.

For the shared employee setup, see Setting up payments/recurring deductions.

Piece-rate payments still require accurate records of hours worked and paid rest breaks. The piece count alone cannot establish that the employee received the applicable minimum pay. Paid rest breaks must be paid; use the break requirements for the actual work period. Employment NZ: rest and breaks.

These are company processing options. Review their effect on the employees and imports that use them.

The top-up uses eligible earnings and THW to assess the minimum hourly return; extra-pay and leave amounts are excluded from that earnings test. Paid rest breaks use the average pay rate after an applicable top-up. An incorrect THW figure can therefore affect both the top-up assessment and the resulting payment.

For the shared entry process, see Piece workers. Use the current applicable minimum rate and the employee's arrangement, rather than a historical rate from a worked example.

Annual holidays are an entitlement to time off in weeks. The statutory minimum is four weeks after each completed year of continuous employment, with rules for matters such as leave in advance, closedowns and unpaid absences. An employment agreement can provide more favourable terms. Holidays Act, section 16.

SmoothPay distinguishes the remaining entitlement from the estimated balance to date. The estimate is useful information, but it is not the same as entitlement or a final-pay liability. See How leave balances work and Reviewing & reading leave balances.

In the Staff screen, select the employee, open the Contract tab, then the nested Employment tab. Review the employee's work pattern, including One day equals, Days per week, weekly hours and pay cycle through the Edit button.

These settings supply defaults and conversions for leave entries. Incorrect work-pattern values can produce incorrect payment quantities or leave deductions.

For annual leave, the agreed definition of a working week must genuinely reflect the employee's pattern. This also matters where hours or days vary. See Holidays Act, section 17.

Ordinary annual leave is paid using the higher applicable ordinary-week and average-week values, with any more favourable agreed weekly value also considered. SmoothPay displays these in the annual-leave wizard.

The comparison is made when the leave is paid, not by retaining the rate that applied when the entitlement arose. Parental-leave-related entitlement has a separate valuation rule, explained below. Holidays Act, sections 21 and 22.

Where an ordinary week cannot be determined from the actual employment arrangement, review Truly irregular work pattern? in the employee's Contract tab, nested Misc tab, using the Edit button beside Contract details. This changes how the ordinary-week side of the comparison is determined; it does not replace the comparison with a four-week-only calculation. It is separate from casual holiday-pay setup. Holidays Act, section 8.

If an employment agreement establishes a more favourable weekly or daily leave value, record it on the employee's contract:

Agreed weekly value participates in the annual-leave comparison alongside the applicable ordinary-week and average-week values.

Agreed daily value (ADV) provides a comparison against the applicable RDP or ADP for daily leave. These values can improve the payment; they do not replace a higher applicable statutory value.

The daily comparison is RDP or ADP versus ADV. Select the appropriate RDP or ADP method first; setting ADV does not make RDP and ADP interchangeable. Review the final payment, including separately entered earnings components, against the applicable daily value.

“Liable earnings” in the calculation refers to earnings included for the relevant leave calculation. It does not mean every taxable payment. Holidays Act gross earnings include required payments under the employment agreement, while exclusions include qualifying expense reimbursements, employer superannuation contributions and statutory annual-leave cash-up. A payment's label, such as “discretionary bonus”, does not settle its treatment. Holidays Act, section 14.

Review work and allowance classifications when introducing a new payment type. Ordinary weekly pay and relevant daily pay have their own rules; the same total is not automatically the right basis for every calculation. See Creating Work codes and Creating Allowance codes.

Use the Leave and Termination Wizard to enter the absence and choose the quantity to consume. Prefer weeks or days for whole-week or whole-day absences.

Check the resulting leave entry, its payment and the weeks consumed before completing the pay.

For the shared entry controls, see Processing Leave and Terminations.

Weeks pay the selected number of weeks at the applicable weekly value. Days convert to weeks using the employee's Days per week contract setting. For a five-day week, one day is 0.2 weeks.

Hours work differently. SmoothPay pays the entered hours at the hourly rate, then divides that payment by the applicable weekly value to determine the annual-leave weeks consumed.

For example, with a five-day contract week, ordinary weekly earnings of $1,000, a higher applicable average of $1,309.52 and an hourly rate of $25:

The hours example consumes $200 ÷ $1,309.52 weeks. Eight hours does not produce the same result as one day merely because the contract's standard day is eight hours.

Weeks or days is the best option to use where the employee is taking a whole weeks or days off, hours is recommeded to be used where the employee is leaving work for agreed amount of hours and wants that time topped up with annual leave.

Consume remaining entitlement uses the remaining entitled balance displayed in the wizard. Confirm that this is the leave the employee has agreed to take.

Consume estimated balance to date uses the estimated quantity. Its payment can be more or less than the employee's total termination liability. It is not a substitute for calculating a final pay. The explanation of the estimate is in How leave balances work.

Leave in advance requires agreement. A negative entitled balance records leave already taken before it has become entitled; the estimated balance does not turn that advance into completed-year entitlement.

Cashing up leave is different from taking time off or processing a termination. SmoothPay allows a cash-up entry; the employer must establish that the request can be accepted.

For the statutory four weeks, the employee must request cash-up in writing, up to one week can be cashed up for an entitlement year, and the employer must respond in writing within a reasonable time. This is not an entitlement to cash up leave in advance or accumulate unused cash-up limits from earlier years. Additional contractual leave needs its agreement considered separately. Holidays Act, sections 28A–28F.

Once the request has been agreed:

Review the resulting entry in Allowances and the leave balance reduction.

The cash-up uses the applicable highest weekly value and reduces the balance by the entered weeks. It is processed as a lump-sum allowance on top of earnings. The checkbox applies to the first weeks row, not the days or hours rows.

A statutory cash-up is excluded from Holidays Act gross earnings for later leave calculations. Payment of outstanding annual leave at termination has different treatment, even where its payslip label includes “Cash-up”. Holidays Act, section 14, section 26.

Establish the employee's entitlement and whether the absence falls on a day they would otherwise have worked before entering paid leave.

Eligibility includes service or hours-worked tests; a casual or part-time label alone does not settle the answer. The statutory day entitlements are not simply reduced in proportion to part-time hours. Check the employee's circumstances and any better contractual terms using Employment NZ's entitlement overview, bereavement guidance and family violence guidance.

For sick and bereavement leave, the initial test is generally six months' continuous employment, or six months meeting the hours test: an average of at least ten hours a week and at least one hour in every week or 40 hours in every month. Family violence leave also has a six-month test, including qualifying periods worked at any time under its alternative hours test. Check continuing eligibility and the applicable entitlement date. Holidays Act: sick, bereavement and family violence leave.

These leave types use the same daily-pay wizard. The workflow also applies when taking an alternative holiday or paying a public holiday not worked.

Relevant daily pay (RDP) reflects what the employee would have earned on the day. Include the relevant components of their normal earnings for that day, rather than assuming basic hours and rate are the entire amount.

Average daily pay (ADP) uses the relevant gross earnings over the previous 52 weeks divided by the whole or part days on which those earnings were earned, including paid holidays and leave. Accurate Days paid history is essential.

ADP can be used where RDP cannot practicably be determined or the employee's daily pay varies within the pay period. There is no general rule to compare RDP and ADP and choose whichever is higher. Holidays Act, sections 9 and 9A.

Where the employee has an Agreed daily value in Staff → Contract → Misc, that value is also considered against the applicable RDP or ADP. Check the more favourable applicable amount when reviewing the payment.

Review the resulting entry before completing the pay.

For a days entry, SmoothPay starts with the hours from the employee's One day equals contract setting. Check this starting point against the hours and earnings the employee would actually have had on that day.

For example, suppose One day equals is eight hours, but the employee normally works three hours on Monday, eight hours Tuesday to Thursday, and ten hours on Friday. A whole-day sick absence requires:

Change Units, keeping days at one for each of these whole-day absences. At $25 per hour, the eight-hour entry pays $200.

A regular allowance that still forms part of what the employee would have earned can remain in its normal separate entry. Do not also build the same amount into the leave payment. Enter other relevant earnings, such as applicable overtime, separately as required.

The ADP route pays the selected days at the applicable daily value, including a higher Agreed daily value where set. With no higher agreed value, one day at ADP of $203.33 produces one unit, a $203.33 rate, a $203.33 payment and one day consumed.

Entering 1.5 days pays 1.5 times that daily value and consumes 1.5 days. Check the entitlement or agreed advance, dates and recorded quantity as well as the amount.

The RDP and ADP examples are alternative methods for an absence. They are not two payments to enter for the same day.

Where a partial-day arrangement applies, the wizard's hours option can supply the paid hours for the RDP route. For example, enter two hours and select Yes when those are the hours to be paid.

The standard contract day provides the default proportion. Check the resulting days consumed against the actual agreed working day: two hours is one quarter of an eight-hour day but one third of a six-hour day. Partial-day sick-leave use should be agreed with the employee. Employment NZ: managing sick leave.

This leave-balance proportion is separate from the Days paid history used for ADP. A part day counts as a day for the statutory minimum ADP denominator; it does not automatically become the same fraction as the sick leave consumed.

First determine whether the public holiday would otherwise have been a working day for the employee. Use the employee's actual arrangement and work pattern; the holiday's date alone does not establish entitlement.

Check special circumstances such as on-call arrangements against the applicable rules. See Employment NZ's public-holiday guidance and Holidays Act, sections 50–59.

The Public holidays button in the Payrun control bar opens a calendar. It does not create the payment. See Public holidays calendar.

The value is automatically multiplied by 1.5 to achieve payment at time and one half.

Where an alternative holiday is due:

Alternatively, use Alternative Leave days to accrue in the employee's Timesheet window and save it there. These are two routes to the pay's accrual setting; do not add the same entitlement twice.

The alternative leave accrues when the pay is completed. Selecting the public-holiday work code does not replace this accrual entry. If an accrual was missed, use Adjusting Leave balances.

To take an alternative holiday later, enter it through Leave taken and use the daily-pay wizard. Outstanding alternative holidays are also considered in final pay.

Record parental leave in the employee's contract settings so SmoothPay can track the absence and affected annual-leave entitlement. It is distinct from ordinary leave without pay.

Annual-holiday entitlement that arises during parental leave, a relevant preference period, or the 12 months following return is subject to the special AWE rule. Existing entitlement from before that period remains separate. The relevant distinction is when the entitlement arose, not simply whether the employee is currently absent. Parental Leave and Employment Protection Act, section 42.

Use the employee's agreed parental-leave documentation.

Leave end date is the last day of the leave, not the day the employee returns to work. Keep the recorded dates aligned with the agreed absence. If the arrangement changes after payroll processing has begun, contact SmoothPay Support about any consequential adjustments.

Leave the parental-leave setting in place when the employee returns. SmoothPay manages the following 12-month tracking period and clears the status automatically afterward; do not switch it off simply because normal work has resumed.

SmoothPay tracks annual leave subject to the parental-leave valuation separately. To consume that balance:

Use weeks for this special valuation; the days and hours options use the other contract or annual-leave valuation routes. If affected entitlement remains after the status has cleared, check the appropriate handling with SmoothPay Support before processing.

Clearing a tracking status is not a reason to assume that every unused entitlement has changed its legal valuation basis. Also seek support when preparing a final pay involving this balance or an employee who does not return from parental leave.

Parental leave payments, keeping-in-touch work, employer top-ups and annual leave are different arrangements. Do not assume that all payments during parental leave have the same effect. Refer to Employment NZ's guidance on parental leave and returning to work.

Qualifying unpaid absence beyond one week can affect the annual-leave anniversary. The law also provides an agreed alternative retaining the anniversary with an adjustment to the AWE divisor. Protected types of absence are not all treated as ordinary unpaid leave. Establish the applicable treatment before using the automatic deferral workflow. Holidays Act, section 16.

Set up the contract absence after completing the employee's last pay before the leave begins. Setting it earlier can cause that pay to end the recorded absence prematurely.

This is the contract absence setting. It is not an instruction to add a paid-leave transaction to each payrun.

Prepare and process the employee's next pay normally when they return. SmoothPay records the end of the absence and calculates the annual-leave deferral, excluding the first week. No manual reset is required for the normal workflow.

The automatic Leave end date is the day before the start of the first pay period processed after the absence. For a weekly period running 14–20 September, that recorded end date is 13 September. It is not the payday or the period-end date.

Review the dates where the employee returns partway through a pay period, has a part-week absence, or uses an agreed treatment that retains the anniversary. Contact SmoothPay Support if the standard recorded dates do not represent the arrangement. Do not manually change the last anniversary to a future deferred date to make it look updated.

SmoothPay keeps the deferred anniversary pending until the relevant pay processing reaches it. The last anniversary date continues to identify the last completed service year in the meantime. That date anchors the since-anniversary holiday-pay calculation, including an intervening final pay.

When the deferred anniversary is reached through pay processing, the last anniversary is updated. The absence-related deferral described here concerns annual leave, not the sick-leave anniversary.

For the shared contract controls, see Nested Misc tab.

A customary annual closedown has specific Holidays Act rules, including at least 14 days' notice. Employees already entitled to annual holidays and employees who have not yet become entitled are treated differently. Confirm which rules apply before creating a closedown payment. Holidays Act, sections 30–35.

For the relevant employee who has not yet become entitled, the closedown calculation is 8% of the applicable gross earnings, less annual holidays already paid in advance, with a new anniversary established. The statutory date is the beginning of the closedown or a permitted reasonably proximate nominated date. It is not automatically a requirement to choose the preceding day.

SmoothPay's assisted process checks qualifying first-year employees and adds the closedown allowance. Use support for cases outside that normal assisted scope.

SmoothPay reuses the saved day and month each year. Change the setting when the closedown timing changes; a routine annual update is not required merely to change the year.

The bulk option becomes available after the company closedown date has been set. It creates the required allowance code automatically; you do not need to create a separate code for this assisted process.

Completing the pay updates the affected anniversary and resets the annual-leave balance. Merely adding the allowance does not complete those changes. Removing the allowance before completion cancels that employee's closedown treatment.

Pay-as-you-go holiday pay is permitted only in the qualifying circumstances, including a genuine fixed term of less than 12 months or work so intermittent or irregular that providing four weeks' annual holidays is impracticable. It must be agreed and separately identifiable, at no less than 8% of the relevant gross earnings. A casual label alone is not sufficient. Holidays Act, section 28.

Once the arrangement has been established:

Do not calculate the inclusive portion by simply taking 8% of an already-inclusive total. Check the separately identified base earnings and holiday pay against the agreement.

The base payment must still satisfy the applicable minimum-wage requirement. From 1 April 2026 the adult minimum is $23.95 per hour, with starting-out and training rates of $19.16 where their conditions apply. See Employment NZ's minimum-wage rates.

If the work becomes regular or the arrangement no longer meets pay-as-you-go conditions, review the employee's contract and leave setup. Truly irregular work pattern? is a separate ordinary-week valuation setting, not an automatic approval for casual loading.

Days paid records the days used for average daily pay. It is separate from hours worked and from the days consumed by an individual leave entry.

The statutory ADP calculation counts whole or part days on which the relevant earnings were earned, including paid leave. Do not turn a long working day into more than one day merely because it exceeded standard hours. Do not automatically copy a fractional sick-leave debit into this history field. Holidays Act, section 9A.

The employee's Days per week contract setting and pay cycle supply a starting default. For example, a five-day week gives ten days for a fortnightly cycle. A monthly default is not a substitute for checking the actual days represented by that pay.

You can also update Days paid in the Timesheet window and Save there. Check the dedicated field rather than assuming that the daily hours grid has established the correct count. See Timesheet function.

This corrects the recorded days without restoring the pay. It does not itself recalculate wages already paid or settle any back-pay obligation. If inaccurate days affected leave payments, review those payments and seek support for the correction required.

The report shows indicative averages as at the start of each pay period. Its columns include four-week and 52-week earnings, non-accruing amounts, relevant periods, week divisors, average values, days paid and ADP.

Use it to review the history behind a calculation and identify records needing investigation. A displayed average is not necessarily the amount actually paid for leave in that period. Generate a new report after correcting source records; an earlier spreadsheet remains a snapshot. The report assists an assessment but does not automatically calculate every consequential back-pay adjustment.

The statement covers the 52 weeks back from the selected pay period. This should give WINZ/ACC the required information when it is requested for an employee under your employment.

See History tab for the shared history controls.

Prepare the employee's ordinary earnings and termination components together in the normal workflow. The anniversary timing exception below is the main case where separate processing is recommended.

The holiday portion combines the annual-leave balance adjustment, where applicable, with percentage holiday pay:

For an employee who has not yet reached their first anniversary, the percentage calculation uses the relevant earnings since employment began, with annual holidays already paid in advance accounted for. Alternative holidays, applicable public holidays and other amounts owed also need to be considered. Holidays Act, sections 23–26, Employment NZ: final pay.

Use Termination % where the employer provides a higher percentage for termination holiday pay:

An entry below 8 does not reduce the 8% minimum. This field affects the termination holiday-pay percentage only; it does not change pay-as-you-go holiday pay.

For example, an employer providing five weeks of annual leave may also provide 10% termination holiday pay. Five weeks does not automatically set this field or, by itself, require the higher percentage. Apply any higher percentage required by the employment agreement or otherwise provided by the employer. The statutory calculation and other amounts owed still apply. Employment NZ: final pay.

This reference deliberately excludes current pay because the amount is not yet known. It also excludes any unpaid TOIL, alternative-holiday or public-holiday amounts that might be due. It does not prepare or complete the final pay and is not the employee's final net payment.

The actual calculation includes the eligible earnings entered in the prepared pay. A difference between the reference and the prepared total is therefore expected where current pay or other applicable payments have been added.

If the employee has unused entitlement to annual leave, assess public holidays that would fall during that leave if it were taken immediately after employment ended. A holiday is payable on this basis only if it would otherwise have been a working day for that employee. An applicable holiday can extend the projected period and bring another holiday into consideration. Holidays Act, section 40.

Use the employee's actual work pattern. For example, a Monday public holiday is not payable on this basis merely because it falls within the following two weeks when the employee would not normally have worked Mondays.

Estimated annual-leave weeks do not replace entitled leave for this assessment. An alternative-holiday payout does not extend the projected annual-holiday period. Add the applicable public-holiday payments before calculating the termination.

Alternative leave is paid automatically by Terminate when an outstanding balance exists. Its final-pay value uses the applicable RDP or ADP for the last day of employment. Holidays Act, section 60.

For automatic TOIL/RDO payout:

This is a processing setting, so apply it according to the employer's arrangements. If automatic payout is not enabled, enter any applicable TOIL payment manually before running Terminate. The setting is not required to enable alternative-leave payout.

See Automatic TOIL/RDO and Manual TOIL/RDO for the shared time-banking procedures.

The calculation note is created as soon as final pay is calculated. You do not need to complete the pay to review it. It records the earnings base, leave values, weekly figures, dates and non-accruing exclusions used in the calculation. See Notes tab.

For a simple example using 8%, with no non-accruing amounts or other leave payments:

The two holiday components are $1,000 of entitled annual leave and $648 of percentage holiday pay. The $1,000 current earnings are also included in the total.

If Termination % is set to 10 for the same facts, the $8,100 base produces $810 of percentage holiday pay. The total becomes $2,810 before subsequent sacrifice and deductions. The higher percentage changes component G, not the value of the remaining entitled week in B.

For the same employee, the reference view excluding current pay shows a $7,100 percentage base, $568 of percentage holiday pay and a $1,568 termination value. Preparing the $1,000 current pay adds that $1,000 and another $80 of holiday pay, giving $2,648 before the subsequent sacrifice and deduction entries.

The payslip labels these components Cash-up annual leave and Termination annual leave percentage. The cash-up label in a termination does not mean the voluntary cash-up procedure was used.

The Cash-up annual leave component depends on the employee's remaining entitled balance, not their estimated balance:

For a negative balance, SmoothPay uses the recorded value paid in advance; it does not revalue those weeks using the employee's current rate. Keep both the leave quantity and the actual payment value accurate.

The percentage holiday-pay component is calculated separately. In the calculation note, a positive annual-leave value is added to the percentage earnings base through line E. If line B is zero or negative, line E is zero. A negative B reduces the total in line H; it is not also subtracted from the percentage earnings base through E.

If you need to add a missed payment, such as an eligible public holiday:

This procedure concerns an uncompleted pay. A correction to a completed historical pay needs the normal completed-pay correction process and the relevant payday-filing checks.

Where the pay period contains both the annual-leave anniversary and a later termination date, complete the ordinary pay first. This updates the anniversary accrual before the separate termination calculation.

If you need to process both together in this situation, contact SmoothPay Support for the manual adjustment method. Properly handled, the separate and combined approaches produce the same entitlement and value. Outside this exception, ordinary earnings and termination components can normally be processed together.

As explained above, a negative annual-leave balance produces a negative Cash-up annual leave component using the actual dollar value paid in advance. Keep that value with the balance, including when bringing records across from another payroll.

The statutory annual-holiday adjustment is separate from authority to recover other overpayments or negative sick/alternative balances. Do not assume that a negative balance authorises a wage deduction. Check the applicable agreement and consent requirements. Employment NZ: deductions.

Where parental-leave-related entitlement is involved, obtain the appropriate support before relying on the ordinary final-pay example above.

For the shared termination controls, see Processing Leave and Terminations.

New Zealand leave calculations need dated pay history, not just an opening total. Bring in 52 weeks of individual pay periods, or all available history where the employee has been employed for less than 52 weeks.

Each period needs its own relevant earnings and Days paid. The four-week and 52-week calculation windows move as new pays are processed, so a single combined amount cannot preserve which earnings and days belong in each window. The history also supports the since-anniversary 8% holiday-pay calculation if the employee leaves.

This history represents payments by the employer whose payroll is moving to SmoothPay. Do not substitute an unrelated previous employer's earnings for those records.

If an annual-leave anniversary has been deferred beyond the normal history window, check with SmoothPay Support that the since-anniversary earnings needed for a later termination are also available.

Use the employee's remaining entitled annual leave and last anniversary date. SmoothPay derives the estimated balance; do not enter estimated weeks as if they were the entitled balance.

Establish the opening balances using the employee's leave controls and the procedure in Adjusting Leave balances. Check the other outstanding leave balances against the previous system too.

For annual leave already taken in advance:

For example, an opening balance of minus one week paid in advance at $1,000 is recorded as −1 week with Value $1,000. The value does not take a minus sign. It preserves the historical amount needed if the balance is still negative on termination.

Before completing the first SmoothPay pay, check the employee's opening entitlement and anniversary, current work pattern, historical days paid, displayed averages, tax and KiwiSaver settings, and resulting payslip. Investigate discrepancies against the source records rather than changing the current pay to conceal a history difference.

See Creating employee records, History tab and Configuring leave settings.

Enter the whole New Zealand bank account number. SmoothPay adds the dashes automatically; you do not need to type them.

Use the shared Direct Credit report & Bank file procedure to produce and review the banking output. Upload and authorise the payment through the bank's normal process. Producing a file does not itself complete the payment.