If you are a non-resident employer with employees working in New Zealand, you will need to register as an employer with Inland Revenue if:
- you have a sufficient presence in New Zealand, or
- you provide your employees with non-cash benefits or make contributions to their superannuation scheme or fund (unless you agree with the employee that they are responsible – this must be documented)
You will need to register before you can file your Employment information – IR348.
Register as an employer
You may need to set up a shadow payroll before you can file employment information.
When to file your employer information
Filing on a payday basis
You need to file the employment information within 2 working days of the relevant day if filing electronically, or within 10 working days if filing by paper.
Employers who use a shadow payroll
You can file according to the payday or twice monthly. The payday is deemed to be 20 days after the payment is made, for example, if the payment is made on 1 November, the payday is 21 November and the due dates would be as follows:
- Paper filer (per payday) - 10 working days from 21 November
- Paper filer (twice monthly) - 10 working days from the end of the month as the payday falls into the 16 November - end of the month period
- Electronic filer (per payday) – 2 working days from 21 November
- Electronic filer (twice monthly) – 2 working days from the end of the month as the payday falls into the 16 November- end of the month period
Pay the deductions to us
You need to pay the PAYE and other taxes you deducted from the employee to us. How often you need to pay depends on your gross annual PAYE deductions, including employer superannuation contribution tax deductions (ESCT).
Gross annual PAYE $500,000 or more
If your gross annual PAYE is $500,000 or more you need to pay us twice a month. If the relevant day is between the 1st and 15th of the month, payment is due by the 20th of the same month. If it is between 16th and the end of the month, payment is due by the 5th of the following month.
60-day grace period
If you have not met any tax obligations, you will have a 60-day grace period so that you can meet or fix your PAYE, FBT and ESCT obligations. This grace period applies if you have taken reasonable measures to manage your employment-related tax obligations, and the employee is present in New Zealand for a period during which 1 of the following applies. They:
- went over a threshold for exemption under section CW 19 of the Income Tax Act.
- went over a threshold for exemption under a relevant double taxation agreement.
- received an unexpected PAYE income payment.
The 60-day grace period runs from the earlier of:
- the date the employee went over a threshold or received a payment
- the date you could reasonably see that the employee would go over a threshold or receive a payment.
During the 60-day grace period you must make a reasonable effort to make or fix the underpayment of tax.
Payers of non-resident contractors: 60-day grace period for late payments of tax
If you're paying a non-resident contractor to work in New Zealand, you must deduct tax from the payments and pay it to us ─ unless an exemption applies.
Payers of non-resident contractors 60-day grace period
PAYE special arrangements
From 1 April 2024, anyone who employs cross-border workers can apply to us for an annual PAYE agreement. This special arrangement means that PAYE tax can be paid by May 31 after the end of that tax year, instead of after each payday.
To get an annual PAYE agreement as an employer, you need to show us why your special circumstances qualify you to pay PAYE once a year.
Examples of special circumstances could include:
- short-term international business travellers
- trailing payments such as fringe benefit tax (FBT) benefits or bonus/share payments made to employees who have left New Zealand already.
Non-resident employers would be required to set up a shadow payroll before they can file an employment information and make payment.
You can make a request through myIR by sending us a message, or by calling us. We will need:
- the name and IRD number of the employer
- a description of the class of employees that the arrangement relates to
- the special circumstances relating to the arrangement.
Fringe benefit tax (FBT)
When you pay an employee for services provided in New Zealand and the employee no longer lives or works in New Zealand, there should not be an FBT liability for fringe benefits provided overseas, unless the fringe benefits relate to the time spent working in New Zealand.
Foreign super scheme
There is some flexibility around taxing employer contributions to foreign super schemes where those contributions are made for the benefit of a cross-border employee.
How to tax contributions to foreign super schemes
Contributions to a foreign super scheme usually come under FBT. However, an employer may choose to apply Employer superannuation contribution tax (ESCT) to cash contributions. This includes contributions to sickness, accident, or death benefit funds in that scheme. Using ESCT means the employer does not have to split the contributions before taxing them.
An employee may also agree that the employer can tax the employer’s superannuation cash contribution as salary or wages using the PAYE rules.
Employer superannuation contribution tax (ESCT)
Fringe benefit tax
Sarah is an employee of a non-resident company. She’s seconded to New Zealand for 3 months to work for another company. She's paid by her non-resident employer. Sarah expects to go back to her home country before the 92-day exemption ends. However, on day 80, she gets a chance to stay in NZ for another 2 months and learn new skills. Sarah will now go over the 92-day exemption.
Sarah’s employer has 60 days from the day they know Sarah will go over the 92-days (day 80) to meet their obligations before any penalties are applied.