What’s in your final pay

Hours worked

Your final pay includes all the hours you’ve worked since your last pay until you leave your job. If you get your final pay before your last day at work, you need to check you’re paid up until your finishing time on your final day.

Unused annual leave or days in lieu

You’ll be paid for any annual leave and days in lieu (alternative holidays) you’ve built up but haven’t used.

How much you’ll be paid for each unused leave day depends on how long you’ve been in the job. If you’ve been there for:

• at least 12 months, you’ll be paid at your normal pay rate
• less than 12 months, you’ll be paid at 8% of your normal pay rate.

If you've been in your job for at least 12 months, your leave days are treated as if you took a holiday immediately after you stopped work. If any public holidays fall during that time, you'll be paid for those too.

Lump sum payments

Any other payments will be:

• written in your employment agreement, or
• negotiated as part of your retirement package.

What's taken out of your final pay

Your employer takes tax and other payments off the total amount you’re paid. It’s your responsibility to make sure they’ve taken the right amounts.

Income tax

You pay tax on the entire amount of your final pay.

Your tax rate might change if you’re being paid a lump sum. Make sure that you pay the correct tax by using the IRD calculator.

Inland Revenue tax on annual income calculator

ACC levy

You pay the ACC levy on:

• wages
• annual leave payments.

If your employer is paying you a lump sum bonus as part of your retirement package there’s no ACC levy on it.

KiwiSaver

Your KiwiSaver contributions, if you're still making them, are taken out of your:

• wages
• annual leave payments.

KiwiSaver contributions aren't taken out of lump sum retirement payments.

If you're 65 you can withdraw your Kiwisaver savings as a lump sum, but you don't have to.

KiwiSaver withdrawals after you turn 65

Student loan repayments

If you’re repaying a student loan, the usual 12% repayment is taken from the total of your final pay, before any other deductions or taxes are taken out.

Child support

If you pay child support, the usual amount you pay is taken out of your:

• wages
• annual leave payments.

You don’t pay child support from lump sum retirement payments — but they might change what you have to pay in the future.

Contact IRD if your circumstances change.

Child support: tell Inland Revenue when your circumstances change