PAYE, KiwiSaver and payday filing: keeping payroll cash on time

For a small employer, payroll isn’t one bill. It is wages to staff, PAYE and KiwiSaver to Inland Revenue, and a filing obligation that starts the moment people are paid. Add this year’s rise in the default KiwiSaver rate and the adult minimum wage lift on 1 April 2026, and the cost of simply having a team has stepped up.

What changed on 1 April 2026?

Item	Before 1 April 2026	From 1 April 2026
Default employer KiwiSaver contribution	3% of pay	3.5% of pay
Default employee contribution	3%	3.5%, with a temporary reduction option
Adult minimum wage	$23.50 an hour	$23.95 an hour
16 and 17-year-olds	Not covered by the employer contribution	Employer contributes 3.5% for eligible members

The KiwiSaver default rises again to 4% on 1 April 2028 for both employer and employee. Inland Revenue notes that where a pay period straddles 1 April, the whole period’s contribution is worked out at the new rate. Employees can apply to stay at 3% for 3 to 12 months, and employers can choose whether to match a reduced rate.

None of this makes the business less profitable on paper in any single week. But a staff of fifteen on average wages can add several hundred dollars a month to payroll cost, and that money leaves earlier than the income that pays for it.

When does the money leave?

Inland Revenue’s schedule depends on how much PAYE and employer superannuation contribution tax you pay across a year:

Employer size	Pay deductions to Inland Revenue
Under $500,000 of PAYE and ESCT a year	Monthly, by the 20th of the following month
$500,000 or more (connected businesses counted together)	Twice monthly: paydays from the 1st to 15th by the 20th; 16th to month end by the 5th of next month
16 to 31 December paydays (twice-monthly payers)	By 15 January, not 5 January

Payday filing, the report of what you paid each person, is due within two working days of every payday. It isn’t optional, and it gives Inland Revenue a live view of your payroll. If the cash isn’t there on the due date, they can see it.

Why does it create a cash gap?

Three common reasons.

The float is thinner than it looks. A monthly payer holds PAYE and KiwiSaver for up to seven weeks after the first payday of a month. That balance feels like spare money in a quiet week, but it isn’t yours.

Revenue lags payroll. If customers pay on the 20th and wages go out on Thursdays, the account swings every month. A late payer makes the swing worse. See slow-paying invoices.

Penalties are steeper. Inland Revenue’s late payment page describes a penalty on overdue employment information amounts, with a further penalty added for each month it stays unpaid, which is higher than the rules for most other tax types. Paying or agreeing an instalment arrangement can reduce the last penalty.

Payroll week squeezing the account? Tell us what’s due and a real person will help you plan the gap.

How do you work out the gap?

1. Take gross wages for each pay run and add the employer KiwiSaver contribution at the current rate.
2. Add PAYE and employee KiwiSaver deductions for the period.
3. Place each amount on its real due date: wages on payday, deductions on the 20th (or the 5th and 20th).
4. Compare the total against when your money genuinely arrives.

The cash gap calculator lets you enter each pay run and each Inland Revenue payment next to expected income, and shows where the balance dips below your buffer.

Ways owners are closing the gap

A payroll holding account. On each payday, transfer the PAYE and KiwiSaver amounts out of the operating account. By the 20th the money is sitting there, untouched.

Earlier income. Deposits, shorter terms and same-day invoicing narrow the distance between wages out and takings in. Our guide to getting invoices paid faster lists practical steps.

A cash line for the heavy weeks. A business cash line absorbs the dip and is cleared when invoices are settled, with charges following the days it is used.

A single top-up. If the aim is simply to rebuild a thin buffer, a short-term loan can do that in one move.

Five-minute payroll health check

Answer these honestly. Any “no” or “unsure” is worth chasing:

1. Has the payroll system been set to the 3.5% default employer rate?
2. Can you say, to the dollar, what is owed to Inland Revenue on the next due date?
3. Is that date shown on your cash forecast?
4. In pay weeks, does the balance stay above the level you consider safe?
5. Have bonuses, overtime and holiday pay been included, since each carries PAYE and KiwiSaver?

Mistakes to steer clear of

• Using withheld deductions to pay suppliers. The penalties outweigh the cost of a bridge.
• Robbing GST to fund wages. That only relocates the hole; see the GST return crunch.
• Flying blind. Forecast twelve weeks so you can tell a one-off from a pattern.

An illustrative example

Illustrative only. A Rotorua hospitality business with 22 staff pays wages weekly and files deductions monthly. After the April rise in the default KiwiSaver rate its monthly payment grew, and it is due on the 20th, a week ahead of most function income. In quiet months the balance sinks below the owner’s comfort level for around five days. A small standby line covers those days while a reserve is rebuilt over summer.

Pay your people, keep your balance

A higher KiwiSaver default and a bigger minimum wage are good for workers, and manageable for employers once the timing is mapped out. If they have opened a hole in your account, we can help. Enquiring takes roughly a minute and doesn’t involve a credit check. Your details go to one team, not a list of lenders, and a real person studies your payroll rhythm before calling.

Tell us the size and frequency of your payroll, as precisely as you can, and we’ll suggest a cushion that fits.

Plan my pay-week cash →