Termination Essentials

NZPPA Certificate in Payroll Termination Essentials (Level 4)

Appendix A: NZPPA Legal & Best Practice Procedure – Requirements for payroll to pay a deceased employees final pay

The following procedure covers the legal and best practice requirements in paying a deceased employees final pay.

Legal position

Section 65 of the Administration Act provides, as you have indicated, that where an employee dies and an amount less than $15,000 is payable by an employer, it is lawful for the employer to make payment of this sum. However, this is only after receiving evidence that the employee has died, and that administration of their estate has not been obtained (intestate), and provided that no payment shall be made to any person unless he or she applies for or consents to receive that payment. To be clear, these payments will only be made where there is no valid will, and the employer has confirmation that the estate will not be administered. • the widow, widower, surviving civil union partner, or children of the deceased; • a surviving de facto partner of the deceased person; • persons beneficially entitled under the deceased's will or on the deceased's intestacy; • any person appearing to be entitled to obtain administration of the estate of the deceased in New Zealand; • any person related by blood or marriage or civil union to the deceased person who undertakes to maintain the children of that person who are minors or any of them; • any person who has and is exercising the role of providing day-to-day care for any of the children of the deceased person who are minors. Where payment is made in line with the above, in good faith, and where the employer has “reasonable grounds” to believe that the payment may be made to the payee, the payment discharges the employer from liability in respect of the money paid. The person who receives the money becomes liable to apply it properly to the administration of the deceased’s estate. The employer can require the payee to give undertakings that they will do so. So, s 65 lists the people that the payment can be made to where the employee had died, and the estate is not administered:

© New Zealand Payroll Practitioners Association, Mar 2026, Ver 9

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