Deductions From Your Pay

Q: Can my employer deduct money from my pay without asking?

Only where the law requires it. PAYE, student loan repayments and child support are deducted whether you agree or not. Anything else needs your written consent, a court order, or must be an overpayment in one of the four situations the law names. A general deductions clause in your employment agreement is not enough on its own: your employer must still consult you about each specific deduction before making it.

Q: Can I cancel a deduction I agreed to?

Yes. You can vary or withdraw written consent at any time, in writing. Your employer must act on it as soon as possible and no later than 2 weeks after receiving your request. Consent to a deduction is never permanent.

Q: Can my employer deduct for breakages, till shortfalls or a customer who did not pay?

Generally no. A deduction has to relate to a measurable loss and be in proportion to it. Where you had no control over what happened, it is likely unreasonable. Employment New Zealand's own example is a customer driving off without paying for petrol: the employer must not take that from the attendant's pay. A deduction also must never be a punishment for breaching your employment agreement.

Q: Can my employer take an overpayment back out of my next pay?

It depends on why you were overpaid. Without your written consent they can only recover it where you were absent without agreement, on strike or partial strike, locked out, or suspended. A one-off payroll error is not on that list, so recovering it needs your written consent. Where recovery is allowed, they must tell you before your next normal pay day and make the deduction within 2 months of telling you.

Q: How much can my employer charge me for accommodation?

Where you have not agreed a cost in writing, no more than 15% of the relevant minimum wage for board, which is accommodation and meals, or 5% for lodging, which is accommodation only. On the adult minimum wage of $24 an hour those ceilings are $4 and $1 an hour. The minimum wage calculation is done before the deduction, not after.

The "other deductions" line of a payslip, and the rules that decide what may appear on it. Figures are for 2026–27.

Your employer may only take money from your pay in four situations: the law requires it, you agreed in writing for a legal and reasonable purpose, you were overpaid in one of four defined circumstances, or a court directed it. Everything else is unlawful, including any deduction made to punish you.

Two authorities decide this, not one

Deductions are governed by two separate bodies, and answers that only quote one of them are half the picture.

Inland Revenue decides what must come off. PAYE, child support, student loan repayments, KiwiSaver employee contributions, and the employer's own KiwiSaver obligations. Your agreement is irrelevant to these.
Employment New Zealand decides what may come off. Everything else, and the answer starts at no. Consent, consultation and reasonableness are all required, and any one of them failing makes the deduction unlawful.

What can appear on the deductions side of a payslip

Lawful deductions from salary or wages in New Zealand, and what authorises each
Deduction	Authorised by	Can you refuse?
PAYE	Required by law	No
ACC earners' levy	Required by law, inside PAYE	No
Student loan repayment	Required by law, on an SL code	No
Child support	Required by law, on an IRD notice	No
KiwiSaver employee contribution	Required once you are a member	Only by opting out or suspending
Union fees	Your written consent	Yes
Payroll giving donation	Your written consent	Yes
Board or lodging	Written agreement, with a capped default	Yes
Repaying a loan from your employer	Written agreement on amount and frequency	Yes
A court-ordered deduction	The court	No

A deductions clause in your agreement is not consent

This is the single most misunderstood rule here. Where your employment agreement contains a general deductions clause, your employer must still consult you before each specific deduction. The consultation has to cover what the deduction is for, when it will be made, and how much it will be.

Employment New Zealand's own example: the employer wants $500 from one pay period, and after consultation they agree on $50 across the next ten pays. Signing the agreement did not settle the amount. The consultation did.

Consent can be withdrawn, and the clock is short

If you asked for or agreed to a deduction, you can change or stop it at any time by asking in writing. Your employer must do what you have asked as soon as possible, and no later than 2 weeks after receiving the request. This applies to union fees, payroll giving, accommodation costs and any other agreed deduction. It does not apply to the deductions required by law, which you cannot switch off.

An agreed deduction still has to be reasonable

Consent alone does not make a deduction lawful. It must also relate to a measurable loss to the employer, and be in proportion to that loss. Excessive or disproportionate deductions are unreasonable even where you agreed to them.

A deduction is likely unreasonable where you had no control over what happened. Theft or damage caused by customers is the standard example, and Employment New Zealand names the case directly: a customer drives off without paying for petrol, and the employer must not deduct the cost from the attendant's pay.

Two further limits are absolute. An employer must not deduct wages for time lost to poor performance, and must not make a deduction to penalise you for breaching your employment agreement.

Accommodation has published ceilings

Where you and your employer have not agreed the cost in writing, the amount they may take is capped as a share of the relevant minimum wage. On the adult minimum wage of $24 an hour from 1 April 2026, those ceilings are:

Maximum accommodation deduction where no cost has been agreed in writing
What it covers	Share of minimum wage	On the adult rate
Board: accommodation and meals	15%	$4 an hour
Lodging: accommodation only	5%	$1 an hour

The minimum wage calculation is done before the accommodation deduction, not after. An employer cannot use accommodation to bring pay below the minimum wage, and the tenancy agreement should be separate from the employment agreement.

Overpayments split into two different rules

Whether your employer can simply take an overpayment back depends entirely on why it happened.

Recoverable without your consent. Only where you were absent from work without agreement, on strike or partial strike, locked out, or suspended. Your employer must tell you before your next normal pay day, and must make the deduction within 2 months of telling you. Where you have no fixed workplace the notice deadline extends to 10 days after that pay day.
Needs your written consent. A one-off miscalculation, a keying error, or a payroll system failure. These are not on the list above, so your employer must not deduct automatically. Without your consent, or if you have already left, their route is mediation rather than the payroll.

Never lawful, whatever the agreement says

A premium or fee for giving you a job or keeping you in one. This includes paying wages into your account and requiring you to hand cash back, which is called wage recycling.
Telling you how or where to spend your pay, such as requiring you to buy a uniform or food from the employer and deducting the cost.
Deducting wages for time lost to poor performance.
Any deduction made to penalise a breach of your employment agreement.
Taking your pay below the minimum wage to fund the employer's own KiwiSaver or other superannuation contribution. The employer's 3.5% sits on top of your gross pay, never inside it.

No IR330 means 45%, under code ND

If you have not given your employer a completed IR330 tax code declaration, Inland Revenue requires them to deduct PAYE at the non-notified rate of 45% plus the ACC earners' levy. The code that appears on your payslip is ND.

That is higher than every ordinary tax code, including the top secondary code. It is not a penalty and there is nothing to appeal. Hand in a completed IR330 and it is corrected from the next pay run, with the overpaid tax settled at the end of the year through your tax refund.

What it costs an employer to get this wrong

Failing to make the deductions Inland Revenue requires carries a shortfall penalty of up to 150% of the PAYE employer deductions. Deliberate failure carries a fine of up to $50,000, imprisonment for up to 5 years, or both, and company directors and officers can be prosecuted personally. Deductions taken from your pay are never the employer's money to use.

Child Support DeductionsThe 60% you must be left with
how to read a New Zealand payslipWhere each deduction appears
Payroll GivingThe deduction that pays you back
Why Your Pay ChangedWhen a new line appears without warning
take-home pay calculatorYour pay after the required deductions

Common questions

Can my employer deduct money from my pay without asking?

Only where the law requires it. PAYE, student loan and child support come off whether you agree or not. Anything else needs written consent, a court order, or must be an overpayment in one of four named situations. A general deductions clause in the agreement is not enough on its own. Your employer must still consult you about each specific deduction first.

Can I cancel a deduction I agreed to?

Yes, at any time and in writing. Your employer must act as soon as possible and no later than 2 weeks after receiving the request. Consent is never permanent.

Can my employer deduct for breakages, till shortfalls or a customer who did not pay?

Generally no. A deduction must relate to a measurable loss and be in proportion to it, and is likely unreasonable where you had no control. Employment New Zealand's example is a customer driving off without paying for petrol: that cannot come out of the attendant's pay. A deduction must never be a punishment for breaching your agreement either.

Can my employer take an overpayment back out of my next pay?

It depends why. Without written consent they can only recover it where you were absent without agreement, on strike or partial strike, locked out, or suspended. A one-off payroll error is not on that list and needs your consent. Where recovery is allowed they must tell you before your next normal pay day and deduct within 2 months.

How much can my employer charge me for accommodation?

Where no cost is agreed in writing, no more than 15% of the relevant minimum wage for board (accommodation and meals) or 5% for lodging (accommodation only). The minimum wage calculation is done before the deduction, not after.

What happens if I do not give my employer an IR330?

Your employer must deduct at the non-notified rate of 45% plus the ACC earners' levy, under tax code ND. Handing in a completed IR330 fixes it from the next pay run.

Where these figures come from

2026–27 tax year (1 April 2026 – 31 March 2027). Last verified 30 July 2026.

how to read a New Zealand payslipEvery line, in the order it appears
Child Support DeductionsThe only deduction with a protected floor
Payroll GivingA deduction that carries a tax credit
Student loan repaymentsThe 12% required by law
KiwiSaver ratesThe deduction you choose the size of