Calculators

PAYE on a redundancy or lump sum, by IRD's rate table

Tax on a redundancy, retirement payment, bonus or other extra pay.

This applies IRD's published lump sum rate TABLE: annualised income plus the lump sum selects a single flat rate, and that rate is charged on the whole payment. It is what an employer actually deducts on the day.

That makes it different from /v1/bonus-tax, which computes the same tax the exact way, as tax on salary plus bonus minus tax on salary alone. Both are right and they give different answers: the table is the deduction, the exact method is roughly where the year-end assessment lands. Use this one to check a redundancy letter or a payslip.

Two rules make redundancy different and both are easy to miss. Redundancy and retirement payments carry no ACC earner levy, so they always take the lower column whatever the income, and no KiwiSaver is deducted from them at all. Treating a redundancy like a bonus overstates the deductions twice. The levy also stops for any extra pay once the total passes the ACC liable earnings cap, which is why the two columns converge at the top.

why_that_rate explains the row that was selected, and annualised_income shows the one simplification: IRD grosses up the last four weeks of pay, while this takes the annual salary given. They agree for steady pay and part company after a month of heavy overtime or commission.

post/v1/lump-sum-tax

Request

  • Base URL: https://api.calculate.co.nz
  • URL: https://api.calculate.co.nz/v1/lump-sum-tax
  • Auth: API key in header X-API-Key

Request body

lump_sumnumber required

The gross lump sum in NZD.

annual_salarynumber required

Annual salary, used as the annualised income. This selects the rate, so the answer depends on it.

payment_typestring

redundancy, retirement, bonus, commission, holiday_pay, exit_inducement or back_pay. Redundancy and retirement carry no ACC levy and take no KiwiSaver, which changes the answer.

kiwisaver_ratenumber

Employee contribution as a DECIMAL. Forced to zero for redundancy and retirement, because no KiwiSaver comes out of those.

has_student_loanboolean

Whether 12% is deducted from the lump sum.

Example request

{
  "annual_salary": 75000,
  "has_student_loan": false,
  "kiwisaver_rate": 0,
  "lump_sum": 15000,
  "payment_type": "redundancy"
}

Response

The flat rate selected, why, and what is left of the payment.

disclaimerstring required

Scope and limits of this calculation.

Example response

{
  "disclaimer": "Estimate only, using IRD lump sum PAYE rates as at 1 April 2026 with the annual salary taken as the annualised income. Your employer grosses up recent pay instead, which can select a higher row. Not tax advice.",
  "result": {
    "annual_salary": 75000,
    "annualised_income": 75000,
    "bracket": "$78,101 to $156,641",
    "effective_rate_percent": 33,
    "excludes_acc_levy": true,
    "kiwisaver": 0,
    "lump_sum": 15000,
    "net_received": 10050,
    "paye": 4950,
    "paye_rate_percent": 33,
    "payment_type": "redundancy",
    "student_loan": 0,
    "tax_year": "2026/27",
    "total_deductions": 4950,
    "total_for_rate": 90000,
    "why_that_rate": "A redundancy payment carries no ACC earner levy, so the excluding-ACC column applies whatever the income. Annualised income 75,000.00 plus the lump sum puts the total in $78,101 to $156,641."
  }
}

Changes

No recorded changes to this operation across all 1 revision of this API.