Termination Essentials

NZPPA Certificate in Payroll Termination Essentials (Level 4)

Government deductions and how they are applied to a termination pay As part of termination pay, the employee may have a range of deductions set by government departments and agencies. Most of these deductions will be processed as they normally would in any pay, but a few are different because they are unique to termination pay.

Type of deduction

Included in a termination pay or excluded:

Any special payments on termination that change the standard payroll process: It is not deducted from a redundancy compensation payment. Does come out of any redundancy compensation payment made. It is not deducted from a redundancy compensation payment. It is not deducted from a redundancy compensation payment. It is not deducted from a redundancy compensation payment. Does not come out of any redundancy compensation payment made. No ACC earner levy is deducted from the redundancy compensation or retirement payment.

Child support

Included from all taxable payments based on the current child support deduction notice. Included from all taxable payments based on the payroll period threshold. Included from all taxable payments based on the current MSD deduction notice. Included from all taxable payments based on the court notice. Included from all taxable payments based on the instruction from the 157 notice. Included from all taxable payments paid in the final pay. Included from all tax payments up to the ACC threshold.

Student Loan

MSD deduction

Court fine

IR 157 Notice

KiwiSaver Contribution (Employer and employee) What payments do not have an ACC earner levy deducted in a termination pay

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

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