2023 April Payroll Changes

It's that time of year again when new payroll and tax changes for the upcoming financial year are set to go into effect. As a New Zealand business owner or manager, you need to be ready for the rates and thresholds of the Minimum Wage, ACC Earners Levy and Student Loan Deduction, which will all increase on Saturday, 1st of April 2023.

Minimum Wage Changes

Employees earning the minimum wage can expect to make $1.50 more an hour, as the minimum wage is going up from $21.20 to $22.70 per hour. Around 229,000 workers in New Zealand are currently paid in between the current and new minimum wage rates, and will see a direct impact on their wages. 

The starting out and training minimum wage will also increase from $16.96 to $18.16 per hour (80% of the adult minimum wage). 

These changes are effective for any hours worked from 1 April 2023.

If you have employees on the minimum wage, starting-out wage or training wage, make sure you update their pay rate in your payroll system. If you’re using PayHero, it’s easy to change pay rates, even in the middle of a pay period. Check out the details here. 

PayHero’s Minimum Wage Top Up feature will automatically factor in the minimum wage increase.

ACC Earners Levy Rate and Thresholds 

From 1 April 2023, employees may notice a little more deducted from their wages to cover the increase of the ACC Earners Levy. This change will also apply if you’re self-employed, a shareholder-employee or contractor. 

ACC Earners’ levies rate will increase from $1.46 to $1.53 per $100 earned, or 1.53%, inclusive of GST. 

The maximum annual threshold for liable earnings that self-employed and business pay Work Account levies on will also increase from $136,544 to $139,384.

PayHero users won’t need to change anything manually in the system, we do it all for you. However, if you’re paying employees using automatic payments set up directly with your bank, you’ll need to adjust these to accommodate the new rates. This isn’t necessary if you’re using PayHero’s Pay Now or Bank Batch files.

Student Loan Repayment Threshold 

On April 1 2023, the annual student loan repayment threshold will increase by $1560, from $21,268 to $22,828. This means that some Kiwis with student loans will gain a few dollars in take-home pay before repaying their loans.

PayHero will automatically calculate student loan deductions if an employee has been set-up with a tax code ending in 'SL'. The Student Loan Repayment pay item will be added to any applicable employees default pay items and deduct the appropriate amount when they are included in a Pay Run.