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As an employer, you do not have to provide your employees with a payslip unless you have agreed to it in their employment agreements. However, employees have the right to access information about their wages and time records relating to their hours of work. Payslips can be a useful way to provide them with their essential pay information, such as deductions and leave balances. To minimise the risk of an employment dispute, you should understand what information to include in your payslips. This article explains what you should have in a payslip, according to New Zealand payroll’s best practices.

What Is a Payslip?

A payslip is a paper or electronic record of your employee’s pay rate, hours worked and how much you paid them, as well as their holiday and leave information.

What Should a Payslip Include?

A payslip includes both personal and pay-related information about your employee. For example, their:

  • name and number;
  • IRD number (you need this to fulfil your PAYE obligations);
  • bank account number and pay date;
  • pay period (for example, weekly or fortnightly);
  • annual holiday balance (for example, annual holidays, alternative holidays and time off in lieu);
  • sick leave balance;
  • alternative holiday balance (if they have worked on one or more public holidays);
  • payments for leave taken;
  • pay rate (at least the relevant minimum wage rate, even if they are paid a salary rather than an hourly rate);
  • bonuses or commissions;
  • deductions (such as ACC, PAYE, KiwiSaver or student loan payments);
  • your KiwiSaver contributions to your employee’s chosen fund; 
  • gross and net pay (before and after deductions and tax);
  • the hours they worked and if they were paid a different rate for overtime.

Xero offers a free payslip template to download as a PDF in exchange for your email address. Most payroll software packages also include payslip templates. 

How to Correct an Error in a Payslip

It is very easy to underpay your employees, even when you have a plan in place. If you have accidentally underpaid an employee and they ask you to revise your calculations, you need to listen to their concerns and agree to fix the error if there is one.

You should not deliberately underpay your employees by holding back their holiday pay or expect them to work overtime without pay. This is considered wage theft and can have a significant impact on your reputation and finances.

Suppose you have accidentally overpaid an employee, and you did not agree to specific terms in your employment agreement on how to manage overpayments. In that case, you need to follow a standard process, which includes: 

  • getting permission from your employee in writing, if you want to recover the excess through deductions from their pay;
  • give them notice, no later than the payday following the overpayment, that you intend to recover the overpayment; and 
  • recover the overpayment within two months of giving them notice about it. 

If you become aware of the overpayment after six months, and your employee spent the money in good faith, then you may not be able to recover it. To avoid potential disputes with your employees, you should include a clause that covers the repayment of accidental overpayments in your employment agreements. However, if you need help to resolve an existing dispute, you should seek advice from your employment lawyer.

Key Takeaways

Under New Zealand law, you do not need to provide your employees with a payslip unless you have agreed to do so in your contract. However, your employees have a right to know how you calculate their pay. You can provide paper or electronic payslips to your employees that include their pay rate, hours worked, deductions and leave balances. You can download a free payslip template from the Xero New Zealand website, or check if your payroll software offers one as part of your package. 

If you need help with drafting or reviewing your employment agreements or resolving an overpayment dispute, LegalVision’s employment lawyers can help. Call 0800 005 570 or fill out the form on this page.

Frequently Asked Questions

Are payslips a legal requirement in NZ?

As an employer, you are not required by New Zealand law to provide your employees with a payslip, unless you have agreed to it in your employment agreement. However, your employees have the legal right to understand how you have calculated their pay, deductions and leave balances, so a payslip is a useful tool for communicating this information.

How do I create a payslip?

You can create a payslip using an Excel spreadsheet or your payroll software. You should include personal and pay-related information about your employees, including pay rate, hours worked, deductions and leave balances. The Xero New Zealand website offers a free payslip template for downloading as a PDF.

Do payslips have to show superannuation?

Yes, your payslip should show all deductions you have taken from your employee’s gross salary, including KiwiSaver, as well as your employer contributions to your employee’s chosen superannuation fund. 

Can I recover my money if I overpaid an employee?

If you have accidentally overpaid an employee, and you did not agree to specific terms in your employment agreement on how to manage overpayments, you need to follow a standard process, which includes getting written permission from your employee to make a deduction from their next pay. You must recover the overpayment within two months of giving them notice about it.

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