Child Support Deductions
Your employer cannot deduct more than 40% of your net pay for child support. That is the same rule as saying you must be left with 60%, which Inland Revenue calls protected net earnings. It applies to child support and to nothing else on your payslip.
One rule, published two ways, by the same agency
Searches for this land on two different numbers and no explanation of why they differ. They do not differ. Inland Revenue publishes the same ceiling from both ends, in two places:
- As a ceiling. The employer guidance says the maximum child support that can be deducted is 40% of net earnings, after tax.
- As a floor. The Inland Revenue glossary says protected net earnings are the 60% of net earnings a person must be allowed to keep after child support has been deducted.
40% out and 60% left is one arithmetic statement. The payroll specification Inland Revenue issues to software developers states the floor version, and adds that it holds after tax, child support and any other attachment order.
A short week, where the cap actually bites
- 1.Your net pay this period, after taxReduced, because you took unpaid leave$1,000
- 2.Child support Inland Revenue asked for$500
- 3.The ceiling: 40% of net pay$400.00
- 4.Deducted, because the request is above the ceiling− $400.00
- 5.Collected from you directly by Inland RevenueVariation code P. Your employer does not deduct it later$100.00
- You are left with$600.00
On a normal pay, the cap does nothing
Protected net earnings usually only matter when you are paid less than usual. On the same $500 assessment with a full $1,600 net pay, the ceiling is $640.00, the full $500.00 is deducted, and nothing is capped. It is unpaid leave, a short week or a period of reduced hours that brings the rule into play, which is exactly when it is least expected.
The protected floor covers child support only
Inland Revenue states this in one sentence: protected net earnings only apply to child support, and an employer should still make other deductions in full even where those add up to more than 40% of your pay.
So PAYE, the ACC earners' levy, your 12% student loan repayment and your KiwiSaver contribution all sit outside the protection. A payslip can leave you with well under 60% of your net pay and still be completely correct. This is the fact most non-IRD pages leave out, and it is the one that answers whether your payslip is wrong.
What your employer records when the amount differs
Where the amount deducted is not the amount Inland Revenue asked for, the employer must give a variation code on the employment information so the liable parent's account is updated correctly. These are the codes, as Inland Revenue defines them.
| Code | What it means |
|---|---|
| C | Ceased employment |
| O | Other, where no another code fits |
| A | Payment in advance |
| D | Previously deducted, an advance was already made |
| P | Protected earnings, the deduction would exceed 40% of net pay |
| S | Short-term absence on unpaid leave |
Code P is the one that appears when protected net earnings stopped the full deduction. If you are querying a payslip, this is the code to ask about.
When you leave a job
Child support is deducted from your last full pay and from any holiday pay owed to you, then the employer uses code C so Inland Revenue can remove you from that employer's records. Because a final pay usually includes an annual holiday payout, it is often larger than a normal pay, and the child support deducted from it is correspondingly larger. That is not an error, and it is not the employer catching up on an earlier shortfall.
Next
- Deductions From Your PayThe rules covering every other line
- Final pay calculatorWhat your last pay is made of
- how to read a New Zealand payslipEvery deduction in order
- NZ tax codesThe code that sets the tax the cap is measured after
- take-home pay calculatorWork out the net pay the cap applies to
Common questions
How much child support can be deducted from my pay in NZ?
No more than 40% of your net earnings, which is your pay after tax. Inland Revenue calls this protected net earnings, and states the same rule elsewhere as being allowed to keep 60%. Two numbers, one ceiling.
Is protected net earnings 40% or 60%?
Both, and Inland Revenue publishes both. The employer guidance gives the maximum deduction as 40% of net earnings. The glossary gives protected net earnings as the 60% you must keep. If 40% comes out, 60% stays in.
Does the 60% protection cover my student loan and KiwiSaver too?
No, and this is what decides whether a low payslip is correct. Inland Revenue states it directly: protected net earnings apply to child support only. Every other deduction is still made in full, even where they total more than 40% of your pay.
What happens to the child support that could not be deducted?
Inland Revenue arranges it with you directly. Your employer deducts what the cap allows, records variation code P, and does not make up the shortfall in a later pay.
Why did child support come off my final pay?
Because it is still due on what you are owed. Your employer deducts from the last full pay and from any holiday pay owed, then uses variation code C so Inland Revenue can close the record.
Can I ask my employer to deduct less child support?
No. It is required by law and your employer has no discretion. Inland Revenue sets the amount and the start date, so a change is a conversation with Inland Revenue rather than with payroll.
Where these figures come from
2026–27 tax year (1 April 2026 – 31 March 2027). Last verified 30 July 2026.
Related
- Deductions From Your PayEvery other line that can come off
- how to read a New Zealand payslipWhere the deduction appears
- Student loan repaymentsNot covered by the protected floor
- Final pay calculatorWhy it comes off your last pay too
- take-home pay calculatorYour net pay, which the cap is measured against