Final pay: what your last pay must include in NZ
Final pay is the last payment you get when a job ends in New Zealand. It must cover everything owed up to the end of your employment: wages for the hours you worked, all the holiday pay you are entitled to, including unused annual leave and alternative holidays, and any other payments owing, such as notice pay. The holiday payment is due on or before the pay day of your final pay period.
What your final pay must include
Employment New Zealand lists what should be in it:
- Wages for the time you worked since your last pay, to your last day.
- Notice pay. If you gave the right notice, you are paid to the end of it, even if your employer asks you not to work it. If you asked to leave early and your employer agreed, you are paid only for the notice you worked.
- Unused annual holidays you are entitled to, paid at the higher of your ordinary weekly pay and your average weekly earnings.
- 8% of your gross earnings since your last anniversary, including the other payments in the final pay, less any annual holidays taken in advance or paid as you go. With less than 12 months' service, it is 8% of everything you have earned.
- Any alternative holidays still owed, at your relevant daily pay or average daily pay for your last day, whenever you earned them.
- Public holidays that fall in your unused annual leave, counted as if you took it straight after your last day, on days you would have worked.
- Anything else owed under your agreement or a leaving package, such as redundancy pay if your agreement provides for it.
Unused sick leave and bereavement leave are not paid out, unless your employment agreement says they are. These are the Holidays Act rules, which apply until the Employment Leave Act 2026 replaces it on 6 August 2028.
A worked example
Say you earn $65,000 a year, $1,250 a week or $250 a day over five days, paid fortnightly, with no overtime, so your ordinary weekly pay and average weekly earnings are the same. You have worked there three years. Since your last anniversary you have earned $20,000, including your final fortnight, and you leave with 6 days of annual leave unused and one alternative holiday owed. No public holiday falls in the six working days after your last day.
| Item | Amount |
|---|---|
| Final fortnight's wages | $2,500 |
| 6 days of unused annual leave at $250 | $1,500 |
| 1 alternative holiday at $250 | $250 |
| 8% of $21,750 ($20,000 plus $1,500 plus $250) | $1,740 |
| Total | $5,990 |
The unused leave and the alternative holiday count as gross earnings for the 8%, which is why they are added before it is worked out.
How final pay is taxed
The wages are taxed like any other pay. At 2026/27 rates, worked out on a full year's pay, the $2,500 fortnight has $450.79 in PAYE, $43.75 in ACC at 1.75% and $87.50 in KiwiSaver at 3.5% taken off, leaving $1,917.96. Inland Revenue's fortnightly tables, which your employer may use, come out a few dollars different.
The holiday pay, $3,490 here, is taxed as a lump sum. Your employer adds your last two fortnightly pays, $5,000, multiplies by 13 to get $65,000 a year, and adds the lump sum: $68,490. That total sits in the $53,501 to $78,100 row, so the whole lump sum is taxed at 31.75% including ACC, which is about $1,108. KiwiSaver and any student loan can come off it too.
PAYE assumes you keep earning at the same rate, so if you do not work for the rest of the tax year, you may be due a refund when Inland Revenue squares up the year after 31 March. Holiday pay also moves back the date Work and Income treats your job as ending, which can delay a benefit: see the stand-down period.
If your final pay is wrong
- Check your final payslip line by line against your agreement and your leave balance, and ask your employer about anything missing, in writing.
- If that does not fix it, call Employment New Zealand on 0800 20 90 20 for advice.
- Money still owed can be claimed as wage arrears in the Employment Relations Authority, even if you accepted a lower payment. The time limit is 6 years, not the 90 days that applies to a personal grievance.
Our article on the first 30 days after losing your job covers the paperwork to gather, and our guide to redundancy in New Zealand covers redundancy pay and notice.
Once you know what lands in your account, add it to your savings in the money runway in Insights, which shows the week your money would run out. The demo has a sample runway you can change, with no account needed.
Plan the weeks after your last pay
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- Employment New Zealand: final pay (last modified 2 September 2026).
- Inland Revenue: calculate PAYE for a lump sum payment at end of employment (last updated 20 April 2026).
- Inland Revenue: taxing holiday pay (last updated 2 June 2020).
- Employment Relations Act 2000, section 131: arrears (version as at 10 July 2026).
- Employment Relations Act 2000, section 142: limitation period for actions other than personal grievances (version as at 10 July 2026).
- Employment New Zealand: how employees can get ready for the changes coming in 2028 (the Employment Leave Act replaces the Holidays Act on 6 August 2028; last modified 13 August 2026).
- jobtracker.co.nz: the money runway in Insights (app.js, runwayModel and renderRunway) and the demo's sample runway (seedExampleProfile), checked 29 September 2026.