Is Your Payroll IRD-Proof? The 7-Point Audit Checklist for Kiwi Founders
Don't let the Holidays Act or ESCT rates become a compliance time bomb. Use our interactive tracker below.
Interactive Audit Tracker
NZ Compliance 2026Deep Dive: The 7 Audit Points
1. The 'Gross Earnings' Definition
Are you calculating holiday pay correctly? Many businesses miss including taxable bonuses or overtime in "Gross Earnings," leading to underpayments under the Holidays Act.
2. Kiwisaver Employer Contribution (3%)
Check your employment agreements. Are you paying the 3% contribution on top of the salary, or as part of a "Total Remuneration" package? These must be set up correctly in your system to avoid disputes.
3. ESCT (Employer Superannuation Contribution Tax)
This is the "hidden" tax. You must use the correct ESCT rate for each employee based on their previous year’s earnings. A flat rate often leads to IRD penalties during a standard audit.
4. The 'Casual' vs 'Permanent' Test
Do you have staff on "8% pay-as-you-go" holiday pay? If their hours have become regular and predictable, they must move to standard 4-week annual leave accrual. Failing this test is a common IRD flag.
5. ACC Employer Levies
Are you using the correct Classification Unit (CU) code? Paying a "Construction" rate for "Admin" staff is an easy way to lose money, while the reverse can lead to massive back-payments.
6. Termination Pay Accuracy
Ensure that when a staff member leaves, you are paying out 8% of their gross earnings since their last anniversary date, plus any unused annual leave balance. This is where most manual errors occur.
7. Records & Accessibility
The Employment Relations Act requires you to produce 7 years of time and wage records upon request. Is your data backed up in a secure, NZ-compliant cloud like Wootz?
Ready to simplify your NZ accounting?
Join the first 50 Founding Partners and lock in our $12/month rate for life. No price hikes, ever.
Claim Your Founding Spot