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Holiday pay calculator: your 8 % holiday pay after tax
Enter the gross earnings your 8 % is paid on and your usual pay. The calculator applies Inland Revenue’s extra-pay method to show the holiday pay you keep.
Reviewed by Radif Partners
Holiday pay after tax
$1,036
8 % of $20,000 = $1,600 gross · PAYE at the extra-pay rate of 31.75 %
| Gross earnings | $20,000 |
| Holiday pay at 8 % | $1,600 |
| PAYE and ACC at the extra-pay rate (31.75 %) | − $508 |
| KiwiSaver (3.5 %) | − $56 |
| Holiday pay after tax | $1,036 |
| Kept per $1 of holiday pay | $0.65 |
Inland Revenue rates for 2026-27: 10.5 % to 39 %, ACC 1.75 % up to $156,641, KiwiSaver default 3.5 %. PAYE is annualised; Inland Revenue’s tables can differ by a few cents per pay. Estimates only, see the methodology.
In New Zealand, casual workers, employees on fixed-term contracts of less than twelve months and anyone leaving a job are entitled to holiday pay of at least 8 % of their gross earnings, under the Holidays Act 2003. When that 8 % is paid out as a lump sum, Inland Revenue treats it as an extra pay: your employer adds up your last four weeks of pay, multiplies it by 13 to get an annual figure, adds the holiday pay and taxes the whole payment at the rate for that total, ACC earners’ levy included. For example, 8 % of $20,000 of earnings is $1,600; on a usual pay of $52,000 a year the extra-pay rate is 31.75 %, and after KiwiSaver at 3.5 % you keep $1,036. When the 8 % is added to every pay instead, it is simply taxed with that pay, as the take-home pay calculator shows.
Holiday pay examples
| Situation | Gross earnings | Usual pay a year | Holiday pay 8 % | Extra-pay rate | After PAYE and ACC |
|---|---|---|---|---|---|
| Casual, a few shifts | $8,000 | $26,000 | $640 | 19.25 % | $517 |
| Casual, part time | $20,000 | $40,000 | $1,600 | 19.25 % | $1,292 |
| Fixed term, full time | $30,000 | $52,000 | $2,400 | 31.75 % | $1,638 |
| Fixed term, full time | $40,000 | $70,000 | $3,200 | 31.75 % | $2,184 |
| Leaving a salaried job | $12,000 | $90,000 | $960 | 34.75 % | $626 |
The rate depends on the usual pay, not on the size of the holiday pay alone. The last row shows why: someone leaving a $90,000 job pays 34.75 % on the pay-out, while a casual worker on $26,000 a year pays 19.25 %.
Extra-pay rates for 2026-27
Inland Revenue publishes one rate per band of annual income, counting the last four weeks of pay multiplied by 13 plus the extra pay. The ACC earners’ levy of 1.75 % is included up to the maximum liable earnings of $156,641; above that point no levy is due, which is why the rate dips before the top band.
| Annualised pay plus holiday pay | PAYE rate with ACC |
|---|---|
| $0 to $15,600 | 12.25 % |
| $15,601 to $53,500 | 19.25 % |
| $53,501 to $78,100 | 31.75 % |
| $78,101 to $156,641 | 34.75 % |
| $156,642 to $180,000 | 33.00 % |
| Over $180,000 | 39.00 % |
When the 8 % applies, and when it does not
Pay-as-you-go holiday pay is allowed for fixed-term employees on contracts of less than twelve months and for employees whose work is so intermittent or irregular that annual leave is impractical. It must be agreed in writing and shown separately on the payslip. Permanent employees take four weeks of paid annual leave instead, paid at the greater of their ordinary weekly pay and their average weekly earnings, and when they leave they receive their untaken leave plus 8 % of the gross earnings since their last anniversary. The holiday pay guide covers annual leave, public holidays and alternative days.
Checking your payslip
Multiply your gross earnings for the pay period by 0.08: the holiday pay line should be at least that amount. If your employer pays it as a lump sum, the PAYE on that line should match the extra-pay rate above for your usual pay. If too much tax is deducted, the difference is refunded in your end-of-year income tax assessment, which you can estimate with the IRD tax refund calculator.
Questions people ask
How is 8 % holiday pay taxed in NZ?
When it is paid separately, as a lump sum, it is an extra pay. Your employer adds up your last four weeks of pay, multiplies it by 13, adds the holiday pay and applies the rate for that total: 19.25 % between $15,601 and $53,500, 31.75 % up to $78,100, ACC included. Added to each pay, it is taxed with that pay.
How much holiday pay do I get on $20,000 of earnings?
$1,600 gross, which is 8 % of $20,000. On a usual pay of $52,000 a year, PAYE at the extra-pay rate of 31.75 % and KiwiSaver at 3.5 % leave $1,036. Without KiwiSaver you would keep $1,092. The rate would be lower on a smaller usual pay.
Which earnings does the 8 % apply to?
All gross earnings for the period: ordinary pay, overtime, commission and taxable allowances, and any holiday pay already paid for public holidays or sick leave. It does not apply to reimbursements such as mileage or tools, which are not earnings. Check that your payslip shows the 8 % as a separate line.
Is a big holiday pay-out taxed at 39 %?
Only if your usual pay plus the pay-out goes above $180,000 a year. The rate depends on your last four weeks of pay multiplied by 13, plus the payment itself. That is why a pay-out rarely changes bracket for a regular wage earner, and why any over-deduction comes back in your end-of-year tax assessment.
Related calculators and guides
Sources
Written by Radif Partners
Publisher of payroll calculators and practical guides · New Zealand PAYE, KiwiSaver and ACC
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Rates for 2026, last checked on