Why Your Take-Home Pay Changed

1. A bonus, commission or back pay

Extra pay does not go through the normal calculation. Payroll annualises your recent regular earnings, adds the extra payment, and taxes the whole payment at the one rate that applies to the result. It is a single marginal rate, not a progressive calculation, which is why a bonus always looks over-taxed.

A $3,000.00 bonus delivers $1,957.50, an effective rate of 34.75%. Nothing has gone wrong, and it is not a penalty. The same bonus paid to someone whose annualised income was lower would be taxed at a lower rate, because the rate is chosen from your income plus the bonus. Add a KiwiSaver contribution and a student loan deduction, both of which apply to the bonus as well, and what lands is lower again. See bonus and redundancy tax.

2. Your tax code changed

A tax code change moves every pay for the rest of the year. It can happen because you filed a new declaration, because Inland Revenue told your employer to change it, or because you started a second job and the codes were reallocated.

The SL suffix is the most common surprise. It is not a new tax: it is repayment of your own loan at 12% of the gross above $464.00 a week, and the balance falls by the same amount. Check the code printed on your payslip against the tax code table before assuming an error.

3. You started or left a job part-way through the year

Payroll never knows what you will earn for the year, so it treats every pay period as though the whole year looked like it. Work part of a year and you are taxed as though you had worked all of it at that rate.

The same mechanism runs the other way when you hold two jobs on main-income codes at once. Each employer gives you the low bands as though the other did not exist, so you are under-taxed all year and receive a bill instead. Neither case is an error in the payroll. Both are corrected at the end-of-year square-up, which is what it exists for.

4. Your KiwiSaver rate changed

KiwiSaver is the one deduction you choose, so it is also the one that changes without any notification from Inland Revenue. On $1,500.00 a week:

The default employee rate rose from 3% to 3.5% on 1 April 2026, which took $7.50 a week out of this payslip without anybody choosing anything. Both the employee minimum and the compulsory employer contribution rise again to 4% on 1 April 2028.

Unlike tax, this money is still yours. Your take-home falls, your savings rise by the same amount, and your employer adds 3.5% of gross on top regardless of what you choose. More on KiwiSaver rates.

5. A student loan catch-up deduction started

Two extra codes can appear beside the normal student loan line, and only one of them is your idea.

• SLCIR is a Commissioner-directed deduction. Inland Revenue has instructed your employer to take extra, usually to recover an unpaid amount, capped at 5% of your gross. On $1,500.00 a week that is up to $75.00 on top of the $124.32 normal deduction, so the loan line more than doubles.
• SLBOR is a borrower-elected extra repayment. You asked for it, and you can stop it.

Neither is a tax and neither is a penalty. Both reduce the loan balance dollar for dollar. If an SLCIR appears without warning, Inland Revenue rather than your employer is the place to ask, because your employer is following an instruction and cannot vary it. More on student loan repayments.

6. Your year contained a 53rd week or a 27th fortnight

A tax year is 52 weeks and a day. Every five or six years a 53rd weekly payday falls inside one, and roughly every eleven years a 27th fortnightly payday does. You are paid more, which is welcome, and slightly under-taxed, which arrives later.

On $1,500.00 a week, 53 pays withhold $17,311.92 while the tax genuinely due on $79,500 of income is $17,503.75. That leaves $191.83 to settle after 31 March, because the extra week was taxed at the rate for a 52-week year rather than at the marginal rate that applies on top of a full one.

The student loan deduction moves the same way. Fifty-three weekly thresholds shelter $464.00 more income than the annual rule allows, worth $55.68. pay frequency calculator is on the pay frequency page.

7. Your earnings passed the ACC levy cap

The ACC earners' levy is 1.75% of earnings up to $156,641 a year, a maximum of $2,741.22. Because payroll annualises each pay period, the cap is applied to the annualised figure rather than to your running total, so it bites hardest on a single unusually large pay.

A $4,000.00 week annualises to $208,000, which is above the cap. The levy inside that week's PAYE is $52.71 rather than the $70.00 a flat 1.75% would give, a difference of $17.29. The PAYE line still rises, but the levy component of it has stopped growing.

Two jobs create the opposite problem. Each employer applies the cap against its own annualised figure and cannot see the other, so between them they can deduct more levy than the $2,741.22 annual maximum. That excess comes back at the end-of-year assessment rather than in the pay run. More on the ACC earners' levy.

8. An extra pay period landed in the month

The most common cause of all, and the only one where nothing whatsoever has changed. Twenty-six fortnightly pays do not divide evenly into twelve months, so two months each year contain three pays instead of two. On a weekly cycle, four months contain five pays instead of four.

On $3,000.00 a fortnight, a two-pay month deposits $4,483.44 and a three-pay month deposits $6,725.16. Your pay did not change. The calendar did.

Check the pay period dates on the payslip before anything else. It is the fastest way to rule out the boring explanation, and it is the explanation about half the time.