The 1st of April is sneaking up fast, and with it comes some important payroll updates. Whether your payroll software takes care of these changes for you or you need to make a few manual tweaks, now is the time to double-check everything is set up correctly.
To save you scrolling through IRD’s website (we’ve done the hard work for you), here’s what’s changing and what you need to do.
ACC Earner Levy & Threshold Increase
From 1 April 2025:
The ACC earner levy is increasing from $1.60 to $1.67 per $100 of liable earnings.
The maximum liable earnings threshold is increasing from $142,283 to $152,790.
What You Need to Do:
✅ Your payroll system should adjust this automatically, but it’s always good to double-check.
✅ If you have any automatic payments set up for existing employees, make sure these are updated to reflect the new threshold.
Minimum Wage Increase
Time to check those pay rates!
From 1 April 2025, the minimum wage is increasing:
Adult minimum wage will increase from $23.15 to $23.50 per hour.
Starting-Out and Training Wage will increase from $18.52 to $18.80 per hour.
What You Need to Do:
Review your payroll system and update any employees on minimum wage.
Send employees a letter confirming their new pay rate (best practice for your payroll records).
Student Loan Repayments
No changes this year! Yes, you read that right—student loan repayment rates and thresholds are staying exactly the same.
Employer Superannuation Contribution Tax (ESCT) Updates
The ESCT rates are changing from 1 April 2025, so make sure your payroll system is applying the correct thresholds:
What You Need to Do:
Some payroll software will update these automatically—double-check yours does.
If it doesn’t, you’ll need to manually calculate the correct rate for each employee.
To work out the ESCT rate, add up the total gross salary/wages paid to the employee last tax year plus the total gross employer super contributions.
Note: ESCT rates only change once a year on 1 April, so once it’s updated, you’re good to go for the year.
Taxing Lump Sum Payments on Termination
If an employee is finishing up, there’s a small but important change in how lump sum are taxed.
Old Rule: Tax was based on an employee’s last 4 weeks of earnings.
New Rule (from 1 April 2025): Tax will now be based on the last 2 pay periods before the extra pay.
What You Need to Do:
Check that your payroll software updates this automatically.
When processing a final pay, double-check the tax calculation to make sure it’s correct.
Final Payroll Checklist Before 1 April 2025
To make sure you’re all set for the changes, here’s a quick payroll checklist:
Make sure your payroll system is updated.
Review and update minimum wage rates for employees.
Confirm ACC levy changes are applied.
Check ESCT rates are correct (especially if your software doesn’t update automatically).
Ensure termination pays are taxed correctly.
If you’re not sure about any of these updates, reach out—better to check now than fix errors later!
Useful Resources
For more details, check out IRD’s official updates here:
If you have any questions or need help applying these payroll changes, get in touch. We’re here to make sure everything runs smoothly so you can focus on what you do best!
