Termination Essentials

NZPPA Certificate in Payroll Termination Essentials (Level 4)

Steps to recover money owed by the employee to the employer on termination

1. Identify what the employee owes (for what) and any details, as the employee may question this on termination.

2. Refer to the employee's employment agreement on what has been agreed regarding deductions from the employee's termination pay. This may be in a separate letter signed by the employee. 3. Communicate with the employee that the business wants to deduct an amount from the employee's final pay (date and amount), referring back to the agreed deduction clause in their employment agreement.

Two different options:

4. The employee may redraw their consent (via written consent) and payroll cannot deduct.

5. The employee does not redraw their consent, and payroll deducts the amount owed from the employee's final pay (from net includes an overpayment).

Section 6. Employer may recover overpayments in certain circumstances (1) In this section, — next pay day , in relation to any overpayment, means the day next following the day on which that overpayment was made upon which the worker to whom it was made would, in the normal course of events, be paid overpayment means any wages paid to a worker in respect of a recoverable period recoverable period , in respect of any employer and any worker, means a period in respect of which that employer is not required by law to pay any wages or (if the employer is entitled to make a specified pay deduction under section 95B of the Employment Relations Act 2000) any part of any wages to that worker, by virtue of that worker's having — (a) been absent from work without that employer's authority; or (b) been on strike (within the meaning of section 81 of the Employment Relations Act 2000); or (c) been locked out (within the meaning of that subsection); or (d) been suspended.

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

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