Four Places New Zealand Pay Calculators Get the Arithmetic Wrong

Q: Why do two New Zealand pay calculators give different answers?

Almost never because of the income tax brackets, which every calculator gets right. The disagreements sit in the four places where Inland Revenue or Employment New Zealand publishes a rule in two parts and a calculator implements only the first part. The four on this page are the Working for Families abatement spill, the base the final pay 8% is charged on, the in-work tax credit reversion after 31 March 2027, and child support protected net earnings.

Q: How do I check whether a pay calculator is right?

Give it one of the official worked examples and compare the output to the published answer. Inland Revenue publishes worked examples for Working for Families, and Employment New Zealand publishes them for final pay and public holidays. If a calculator returns a different figure from the example, the calculator is wrong. Every example on this page is an assertion in this site's test suite.

Q: Does the Working for Families abatement come off both credits?

It comes off the family tax credit first. If the abatement is larger than the family tax credit, the remainder carries onto the in-work tax credit. In IRD's own example a family on $100,000 with two children has an abatement of $15,152.50 against a full family tax credit of $14,375.00, so the family tax credit goes to zero and the remaining $777.50 comes off the in-work tax credit, leaving $6,892.50.

Q: Is the 8% holiday pay in a final pay charged on the leave payout too?

Yes. Employment New Zealand states it twice in its own worked examples. The 8% is charged on gross earnings for the whole period of employment, and the annual holiday pay and alternative holidays being paid out in that same final pay form part of those gross earnings. Excluding them understates the payment.

Q: Does the in-work tax credit stay at $147 a week?

No. Inland Revenue states that after 31 March 2027 the maximum returns to $97 a week and $5,070 a year, and that it may reduce earlier if the cost of petrol drops below $3 a litre for four weeks. Any calculator publishing $147 without the reversion is publishing a figure with a known end date and not saying so.

Q: Do protected net earnings apply to all my deductions?

No. Protected net earnings apply to child support only. PAYE, the ACC earners' levy, KiwiSaver and student loan repayments are all still deducted in full. That is why a payslip can leave you with well under 60% of your net pay and still be correct.

Four deductions where calculators disagree with Inland Revenue and Employment New Zealand, each settled against an official worked example. Figures use 2026–27 rates and are recomputed from this site's engine at build time.

Every New Zealand pay calculator gets the income tax brackets right. The four disagreements below sit where Inland Revenue or Employment New Zealand states a rule in two parts and a calculator implements the first part only. Each one is settled here against the official worked example, and each example is an assertion in this site's test suite.

The four, at a glance

Four arithmetic divergences in New Zealand pay calculators
The rule	The common error	What it costs
Working for Families abatement	Stops abating when the family tax credit reaches zero	$777.50 a year overstated
Final pay 8% accrual	Excludes the leave payout in the same final pay from the base	$272.00 understated on this example
In-work tax credit rate	Publishes $147 a week with no reversion date	$2,600 a year, from 31 March 2027
Child support protected earnings	Applies the protected floor to every deduction	Overstates take-home pay on a protected payslip

1. The Working for Families abatement spills, it does not stop

One abatement is worked out on family income above $44,900 at 27.5%. It is applied to the family tax credit first. Where the abatement is larger than the family tax credit, the remainder carries onto the in-work tax credit. It does not stop at zero, and it is not applied to each credit separately.

Inland Revenue publishes this as a worked example. A family with two children on $100,000 of family income has a full family tax credit of $14,375.00 and a full in-work tax credit of $7,670.00.

IRD's example: two children, $100,000 family income

1.Family income above $44,900$55,100.00
2.Abatement at 27.5%$15,152.50
3.Applied to the family tax credit firstThe full family tax credit is $14,375.00, so it goes to zero$14,375.00
4.Remainder carried onto the in-work tax creditThis is the step a calculator that stops at zero never takes$777.50
5.In-work tax credit, $7,670.00 less the remainder$6,892.50
Total entitlement$6,892.50 a year, $132 a week

What the error returns

A calculator that stops abating once the family tax credit reaches zero pays the full in-work tax credit of $7,670.00 rather than $6,892.50. It overstates this family's entitlement by $777.50 a year. Inland Revenue's own wording on the example is that "the remaining abatement of $777.50 will come off their in-work tax credit".

2. The final pay 8% is charged on the leave being paid out

On a final pay, 8% is charged on gross earnings for the whole period of employment. The annual holiday pay and alternative holidays being paid out in that same final pay are part of those gross earnings, so the 8% is charged on them too. Employment New Zealand states this twice in its own worked examples. The arithmetic is circular by design, and it is the step most calculators skip.

A final pay with wages, three weeks of leave and two alternative holidays

1.Gross earnings since the anniversary$6,000.00
2.Wages owed to the last day$2,000.00
3.Annual holiday pay, 3 weeks$3,000.00
4.Alternative holidays, 2 days$400.00
5.Accrual base, including the leave paid out nowA narrow base of earnings plus wages alone is $8,000.00$11,400.00
6.8% of the accrual baseThe narrow base returns $640.00$912.00
Final pay, gross$6,312.00

What the error costs

Charging the 8% on earnings and wages alone returns $640.00 instead of $912.00. On this example the final pay is short by $272.00. The gap grows with the size of the leave balance being paid out, so it is largest for the people leaving with the most untaken leave.

3. The in-work tax credit has a published end date

The in-work tax credit covering the first 3 children is $147 a week and $7,670 a year. Inland Revenue publishes two conditions alongside that figure, and most secondary sources quote the rate without either.

In-work tax credit before and after the reversion
Period	A week	A year
To 31 March 2027	$147	$7,670
From 1 April 2027	$97	$5,070

Inland Revenue also states the rate may reduce back to $97 earlier if the cost of petrol drops below $3 a litre for four weeks. A calculator publishing $147 with no reversion is publishing a figure with a known end date and not saying so. The difference is $2,600 a year.

4. Protected net earnings apply to child support only

Inland Revenue publishes the same rule two ways. The employer page gives a 40% ceiling on the child support deduction. The glossary and the payroll specification give a 60% floor under net pay. They are one identity, not two rules, and secondary sources routinely quote one without the other.

The part that changes a payslip is narrower and rarely published. Protected net earnings apply to child support and nothing else. PAYE, the ACC earners' levy, KiwiSaver and student loan repayments are all still deducted in full. A payslip can therefore leave someone with well under 60% of their net pay and be entirely correct. A calculator that applies the floor to the whole deduction stack overstates take-home pay for every protected payslip it touches.

How to check any pay calculator

Each of the four has a published worked example with an exact expected answer. Give a calculator the inputs and compare the output. No judgement is involved, because the correct figure is already published.

Four inputs that separate a correct calculator from an incorrect one
Give it	The published answer
Family income $100,000, two children	In-work tax credit $6,892.50, not $7,670.00
Final pay: $6,000 earned, $2,000 wages, 3 weeks leave at $1,000	8% accrual of $912.00, not $640.00
In-work tax credit for a year starting 1 April 2027	$5,070, not $7,670
A child support deduction at the protected floor	Student loan and KiwiSaver still deducted in full

Where this site's figures come from

Every number above is recomputed from this site's engine when the site builds, against the same functions the test suite asserts on. The methodology page sets out how this calculator works, including what it deliberately does not model. The Working for Families figures are checked against five Inland Revenue worked examples and the final pay figures against Employment New Zealand's. If the engine stops reproducing them, the build fails and this page cannot publish a figure the calculator does not return.

Common questions

Why do two New Zealand pay calculators give different answers?

Almost never the tax brackets, which everyone gets right. The disagreements sit where Inland Revenue publishes a rule in two parts and a calculator implements the first part only. The four below are the ones that change a real figure.

How do I check whether a pay calculator is right?

Feed it an official worked example and compare. Inland Revenue publishes them for Working for Families, Employment New Zealand for final pay and public holidays. If the output differs from the published answer, the calculator is wrong.

Does the Working for Families abatement come off both credits?

The family tax credit first, then the remainder spills onto the in-work tax credit. A calculator that stops abating at zero pays $7,670.00 instead of $6,892.50.

Is the 8% holiday pay in a final pay charged on the leave payout too?

Yes. The 8% is charged on gross earnings for the whole period, and the leave being paid out in the same final pay is part of those earnings. Excluding it understates the final pay.

Does the in-work tax credit stay at $147 a week?

No. Inland Revenue states it returns to $97 a week and $5,070 a year after 31 March 2027, a difference of $2,600 a year.

Do protected net earnings apply to all my deductions?

No, child support only. PAYE, ACC, KiwiSaver and student loan are still deducted in full, so a payslip can leave you under 60% of net pay and be correct.

Written by Nathan Kerr, payroll writer and editor2026–27 rates. Last reviewed 25 August 2026.

Where these figures come from

2026–27 tax year (1 April 2026 – 31 March 2027). Last verified 25 August 2026.

MethodologyWhat the calculator models, and what it does not
Working for FamiliesA payment from IRD, not a deduction
Final PayWhat you're owed when you leave a job
Child Support DeductionsThe 40% cap, and the 60% you keep
vs the IRD CalculatorWhat theirs does, and what it leaves out
Official SourcesEvery figure, and the page it came from