NZ Redundancy, Bonus & Lump Sum 'Extra Pay' Tax Calculator
Calculate Inland Revenue (IRD) Extra Pay withholding tax on redundancy, severance, bonuses, and leave cash-outs using the 4-week annualized formula and ACC levy exemptions.
Calculate Inland Revenue (IRD) Extra Pay withholding tax on redundancy, severance, bonuses, and leave cash-outs using the 4-week annualized formula and ACC levy exemptions.
Calculate Inland Revenue (IRD) Extra Pay withholding tax on redundancy, severance, bonuses, and leave cash-outs using the 4-week annualized formula and ACC levy exemptions. Calculate exact, penny-accurate projections compliant with 2026 Inland Revenue (IRD) • ACC • Reserve Bank of New Zealand (RBNZ) standards using Calconova's deterministic IEEE-754 (Decimal.js) calculation engine with instant breakdowns.
After all statutory deductions
$78,101 – $180,000 (33%)
Exempt on redundancy under law
-$9,900 total withheld
Payment category, lump sum gross, and preceding 4 weeks pay.
Marginal extra pay tax and net remittance.
\text{Annualized Base Earnings} = \text{Gross Pay in Past 4 Weeks} \times 13 \\
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\text{Threshold Income} = \text{Annualized Base} + \text{Gross Lump Sum} \\
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\text{Extra Pay Rate} = \begin{cases} 10.5\%, & \le \$15,600 \\ 17.5\%, & \$15,601 - \$53,500 \\ 30.0\%, & \$53,501 - \$78,100 \\ 33.0\%, & \$78,101 - \$180,000 \\ 39.0\%, & > \$180,000 \end{cases} \\
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\text{ACC Levy (1.60\%)} = \begin{cases} \$0 \text{ (Exempt)}, & \text{if Redundancy / Severance} \\ 1.60\%, & \text{if Bonus or Leave Cash-Out} \end{cases}Under NZ Inland Revenue rules, lump sum payments such as redundancy compensation, bonuses, and accrued leave cash-outs are taxed as 'Extra Pay'. Unlike Australia or the UK, NZ has no tax-free redundancy allowance. Withholding rates are determined by annualizing the last 4 weeks of gross pay (×13) plus the lump sum. Crucially, statutory redundancy payments are legally EXEMPT from the 1.60% ACC Earner's Levy under the ACC Act.
All calculations, amortizations, and scenario projections displayed on this page are strictly for informational and educational purposes. Nothing herein constitutes investment, financial, tax, or legal advice. Actual Reserve Bank of New Zealand (RBNZ) interest rates, IRD PAYE brackets, ACC Earner's Levy, KiwiSaver regulations, and lender criteria may vary. Calconova explicitly disclaims all liability for any decisions taken based upon these calculations. Consult a qualified financial advisor, CPA, or official Inland Revenue documentation prior to executing financial commitments.
No. In New Zealand, redundancy and severance payments have no tax-free threshold. The entire lump sum is subject to income tax under IRD Extra Pay marginal withholding rules.
No! Under Section 219 of the Accident Compensation Act 2001, redundancy compensation payments are explicitly exempt from the 1.60% ACC Earner's Levy. However, bonuses and leave cash-outs remain subject to the ACC levy.
KiwiSaver is generally not compulsory on genuine redundancy compensation unless agreed in the employment contract. For bonuses and annual leave payouts, standard KiwiSaver deductions apply.
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