Payroll & Finance
Your 2025 Payroll Update: What's Changing from 1 April?
March 12, 2025
From 1 April 2025, a fresh set of payroll and tax changes are coming your way. Don't worry - we've got you covered! Here’s everything you need to know, clearly laid out so you can confidently tick payroll compliance off your list. Let's dive in!
Minimum Wage Rates are Rising
First up, the minimum wage rates are getting a bump. Here’s the breakdown you’ll need to update employee pay rates in PayHero:
Adult Minimum Wage: from $23.15 to $23.50 per hour
Starting-Out Wage: from $18.52 to $18.80 per hour
Training Wage: from $18.52 to $18.80 per hour
If you have employees on minimum wage, it’s easy to update their pay rates in PayHero. There are two approaches, depending on whether or not they are recording timesheets in PayHero - get the details here.
If you have a large volume of employees on minimum wage we can update their rates in bulk - contact our support team for more info.
PayHero’s Minimum Wage Top Up feature will automatically factor in the minimum wage increase.
ACC Earners Levy Changes
The ACC earners’ levy rate is increasing slightly from 1.60% to 1.67%, with the income threshold moving from $142,283 to $152,790. PayHero will automatically handle this change.
Remember, this means you’ll see slight decreases in the take home pay amount for all of your employees.
Student Loan Rates and Thresholds
Great news! No changes this year to student loan repayment rates or thresholds. Nothing to worry about here!
ESCT (Employer Superannuation Contribution Tax) Changes
Small adjustments to ESCT thresholds and rates are kicking in. Here’s the latest breakdown:
Income Range | ESCT Rate |
$0 – $18,720 | 10.5% |
$18,721 – $64,200 | 17.5% |
$64,201 – $84,000 | 30% |
$84,001 – $216,000 | 33% |
$216,001 and upwards | 39% |
PayHero will automatically apply these new rates.
Taxing Lump Sum Payments at Employment End
Changes are coming to the way lump sum payments (final pays, bonuses, holiday pay) are taxed when employment ends.
Lump sum payments are usually taxed based on the employee’s last 4 weeks of earnings, which makes perfect sense for bonuses and other extra payments that occur during employment. However, it’s common for final pays to occur outside of the employee’s normal pay cycle. To accommodate this, IRD now specifies that lump sum tax in a final pay should be based on the last two pay periods the employee received payment for.
PayHero will automatically update to manage this, so you don’t need to do anything different. Need a refresher on processing final pays in PayHero? Check out our article.
Don't Forget Your Payments!
With these changes, it’s a good opportunity to double-check and update any automatic payments you’ve set up for payroll. Better yet, why not get PayHero to manage employee and tax payments for you? It’s easy to switch to our direct debit or bank transfer payment methods.
What You Need to Do
For PayHero customers, there’s very little to action. Remember to manually update minimum wage rates and review any automatic payments to account for the changes in tax calculations, and we’ll handle the rest!
Got questions? Our support team is here to help you sail smoothly into the new tax year.
