End of Year Processing Guide

Check that the provided employee details are up to date. In particular, check the employee's email and postal address. We will send earnings certificate notifications to the email address provided in the email field, so it is important you enter the correct information. However, you can print the earnings certificate and disperse it manually if required.

Additionally, check that you have the employee's complete and correct address as this will prevent you from being able to publish your earnings certificates. A quick way to audit this information is to generate an Employee Details Report and select the relevant display columns to retrieve the information. If there are any changes made to the employee data, then make sure you submit the updated employee data to the IRD via the IRD Employee Details report. 

Also, make sure you enter the correct employee tax code. A quick way to audit this information is to generate an Employee Details Report and select the Tax Code display column to retrieve the information. Again, if there are any changes made to the employee data, then make sure you submit the updated employee data to the IRD via the IRD Employee Details report. Finally, make sure your IRD settings are up to date. You can do this by going to IRD Settings page.

Make sure that all pay runs are finalised, including any amendment pay runs you have to create. The date you paid the pay run determines which financial year we apply to the pay run. Earnings certificates generated for the 2025/2026 financial year will only include earnings etc, from pay runs paid within that financial year. For example:

• We will include a pay run with a pay period ending 30/3/2026 and paid on the 31/3/2026 in the 2025/2026 financial year.
• We will include a pay run with a pay run period ending 30/3/2026, but paid on the 1/4/2026 will in the 2026/2027 financial year.

If you want to include every day worked within the financial year, you might have to split a pay run. For example, a weekly pay run for a period ending 1/4/2026, paid 2/4/2026. Create a pay run as normal and set the pay period ending 31st of March. You will then need to adjust the employee's hours to reflect the hours worked for the 26th to the 31st of March and then finalise the pay run.

Next, create another pay run for the period ending on the 1st of April and adjust the employee's hours to reflect the hours worked for the 1st. Finally, finalise the pay run using the normal date paid, being 2nd of April 2026. 

Once all pay runs are finalised, including any amendments, you will need to submit the associated pay run's payday filing, employment information (EI) and employment amendment (EA) to the IRD. Make sure you submit the payday filing, EI and EA successfully using Payday Filing. If there are any payday filing errors, fix the payday filing errors accordingly, then resubmit the payday filing, EI, and EA. 

Once you have completed the steps above, you will be ready to publish the employee earnings certificate. Please refer to this article for instructions on how to complete this step.  Before publishing earnings certificates, it is recommended that you reconcile the payroll data showing in the earnings certificates with that of the Detailed Activity reports. As you are not legally bound to issue earnings certificates, you can issue them at your own discretion.

It will make sure that the data provided to employees is 100% correct. You can export an Excel version of the earnings certificate report by clicking on the Export button in the Earnings Certificate screen. It will display the data based on your report filters.

Then, export the Detailed Activity Report (DAR) using the same reporting period. Grouping the DAR by an employee's default location will help with the reconciliation as there will only be one row per employee. You can then compare the total amounts for each component between the two reports. 

Once you are happy, you can send the earnings certificate notifications to the employees and they will receive an email notification letting them know that their earnings certificate is available for download, along with a link for downloading. 

The Budget 2025 KiwiSaver Amendment introduces three critical changes for April 2026:

1. Default Rate Hike: The minimum contribution rate for both employees and employers increases from 3% to 3.5%. (Note: A further hike to 4% is slated for 2028).
2. The "Reduced Rate" Provision: Employees can apply via IRD for a temporary reduction of the contribution rate to remain at 3% for up to 12 months. Employers are permitted to match this lower 3% rate.
3. Youth Eligibility: Employees aged 16 and 17 now qualify for compulsory employer contributions (previously only 18+).

Before the start of the new tax year, employee ESCT rates must be reviewed and updated as required. Please refer to this article for instructions on how to complete this step. Information only, ESCT rate threshold for the 2026/2027 financial year.

The following is updated for the Tax Relief changes made in Budget 2024, commencing 31 July 2024: 

* From the IRD:

•  ACC earners levy charges on a maximum amount of income. Any amount of income earned over this maximum is not liable for the ACC earners' levy. Despite this, for secondary tax codes, you would include the ACC earners’ levy in the PAYE calculations with no income threshold applied, i.e., regardless of the customer’s earning, you would deduct the ACC earners’ levy as part of their PAYE.
• You will therefore you would continue to deduct the ACC earners’ levy when using the SA or SA SL tax code. Even though the intention for using the SA or SA SL tax code is for income of more than $180,000, this does not change the inclusion of the ACC earners levy. You are required to use this approach to the deduction, as there is no way of assuring that all customers using the SA or SA SL tax codes are also receiving primary income that is equal to or more than $152,790 (current ACC prescribed maximum income).

You will need to review the employee's secondary income tax code and update accordingly within the employee's profile Tax code declaration page. A quick way to audit this information is to generate an Employee Details report and select the Tax Code display column to retrieve the information.

If there are any changes made to the employee's tax code, then make sure you submit the updated employee data to the IRD via the IRD employee details report. Please note that any pay runs with a date paid of 1/4/2024 or later will use the FY2024/2025 tax tables automatically. Please see here for further clarification of the ACC earners levy and SA, SA SL tax codes.

The student loan repayment thresholds for the new financial year are as per below, and have been automatically loaded. Please note that any pay runs with a date paid of 1/4/2025 or later will use the new FY2025/2026 student loan repayment threshold automatically.