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RD 4: Payment of amounts of tax to Commissioner
or “Paying tax collected from workers' pay to the government”
You could also call this:

“What counts as income from work for tax purposes”

Salary or wages means money you get for working. This includes:

  • Your regular pay
  • Bonuses, commission, overtime, and other extra pay
  • Payments for expenses you had at work
  • Payments to working partners or owners in a business
  • Some pensions and allowances related to past work
  • Payments to certain government officials
  • Some government benefits and grants
  • Parental leave payments
  • Some employer superannuation contributions you choose to treat as salary

Salary or wages does not include:

  • Tax-free income
  • Extra pay (like redundancy)
  • Schedular payments
  • Most employer superannuation contributions
  • Payments excluded by regulations

The law gives more details about specific types of payments that count as salary or wages for tax purposes.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

Next up: RD 6: Certain benefits and payments

or “Benefits and payments considered part of your income for tax purposes”
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Part R General collection rules
Employment-related taxes: Types of PAYE income payments

RD 5Salary or wages

  1. Salary or wages—

  2. means a payment of salary, wages, or allowances made to a person in connection with their employment; and
    1. includes—
      1. a bonus, commission, gratuity, overtime pay, or other pay of any kind; and
        1. a payment described in subsections (2) to (10); and
          1. an accident compensation earnings-related payment; and
            1. a payment of earnings compensation under the Compensation for Live Organ Donors Act 2016; and
              2. does not include—
                1. an amount of exempt income:
                  1. an extra pay:
                    1. a schedular payment:
                      1. an amount of income described in section RD 3B(3):
                        1. an amount of income described in section RD 3C(4):
                          1. an employer's superannuation contribution other than a contribution referred to in subsection (9):
                            1. a payment excluded by regulations made under this Act.

                              1. A payment of expenditure on account of an employee is included in their salary or wages.

                              2. A payment to a working partner under section DC 4 (Payments to working partners) is included in their salary or wages.

                              3. A payment to a working owner under section DC 3B (Payments to working owners) is included in their salary or wages.

                              4. A periodic payment of a pension, allowance, or annuity made to a person or their spouse, civil union partner, de facto partner, child, or dependant in connection with the past employment of the person is included in their salary or wages.

                              5. A payment to a person is included in salary or wages of the person if it is made as—

                              6. salary to the Governor-General:
                                1. salary or allowances to a member of Parliament:
                                  1. salary or principal allowances to a judicial officer referred to in section 12B of the Remuneration Authority Act 1977:
                                    1. salary or allowances to a member of the Employment Relations Authority.

                                      1. A payment to a person made under section 7 of the Governor-General Act 2010 is included in the salary and wages of that person.

                                      2. A payment of the following benefits or grants is included in salary or wages

                                      3. a gratuitous payment as described in paragraph (a) of the definition of pension in section CF 1(2) (Benefits, pensions, compensation, and government grants):
                                        1. a main benefit:
                                          1. a veteran's pension, other than a veteran's pension paid under section 182 of the Veterans' Support Act 2014:
                                            1. New Zealand superannuation, other than New Zealand superannuation paid under section 26(2)(b) of the New Zealand Superannuation and Retirement Income Act 2001:
                                              1. a retirement lump sum paid under Part 5, subpart 7 of the Veterans’ Support Act 2014:
                                                1. weekly income compensation paid under Part 3, subpart 4 of the Veterans’ Support Act 2014:
                                                  1. weekly compensation paid under Part 4, subpart 5 of the Veterans’ Support Act 2014:
                                                    1. weekly compensation or aggregated payments, as applicable, paid under schedule 2, part 4, clause 54, 55, 58, or 59 of the Veterans’ Support Act 2014:
                                                      1. the amount of an honorarium that is paid by Fire and Emergency New Zealand to a volunteer as defined in section CW 62B(4) (Voluntary activities):
                                                        1. a basic grant and independent circumstances grant made under regulations made under section 645 of the Education and Training Act 2020 or an enactment substituted for that section.

                                                          1. A parental leave payment or preterm baby payment made under Part 7A of the Parental Leave and Employment Protection Act 1987 is included in salary or wages.

                                                          2. A benefit treated as income under section CE 1(1)(bb) (Amounts derived in connection with employment) is included in salary or wages.

                                                          3. An amount of an employer's superannuation cash contribution that an employee chooses to have treated as salary or wages under section RD 68 is included in salary or wages.

                                                          4. An unrepaid PAYE income overpayment that is treated as salary or wages under section RD 8B(2)(a) is included in salary or wages.

                                                          Compare
                                                          • 2004 No 35 s OB 1 salary or wages
                                                          Notes
                                                          • Section RD 5(1)(b)(ii): amended, on , by section 252(1) of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
                                                          • Section RD 5(1)(b)(iiib): inserted, on , by section 30 of the Compensation for Live Organ Donors Act 2016 (2016 No 96).
                                                          • Section RD 5(1)(b)(iv): repealed (with effect on 7 December 2014), on , by section 14(1) of the Taxation (KiwiSaver HomeStart and Remedial Matters) Act 2015 (2015 No 40).
                                                          • Section RD 5(1)(c)(iv): replaced (with effect on 30 March 2017), on , by section 153 of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).
                                                          • Section RD 5(1)(c)(ivb): inserted (with effect on 30 March 2017), on , by section 153 of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).
                                                          • Section RD 5(1)(c)(v): amended (with effect on 1 April 2008), on (applying for the 2008–09 and later income years), by section 126(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
                                                          • Section RD 5(1)(c)(v): substituted (with effect on 1 April 2008), on , by section 504(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                                                          • Section RD 5(1)(c)(vi): amended, on , by section 8(1) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).
                                                          • Section RD 5(1)(c)(vi): amended, on , by section 133 of the Taxation (KiwiSaver) Act 2007 (2007 No 110).
                                                          • Section RD 5(1)(d): repealed, on , by section 8(2) of the Taxation (Annual Rates and Budget Measures) Act 2011 (2011 No 23).
                                                          • Section RD 5(3B) heading: inserted, on (applying for income years beginning on or after 1 April 2011), by section 126(2) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
                                                          • Section RD 5(3B): inserted, on (applying for income years beginning on or after 1 April 2011), by section 126(2) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
                                                          • Section RD 5(5) heading: replaced, on , by section 262 of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                                                          • Section RD 5(5): replaced, on , by section 262 of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                                                          • Section RD 5(5B) heading: inserted (with effect on 1 April 2013), on , by section 123(1) of the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Act 2014 (2014 No 4).
                                                          • Section RD 5(5B): inserted, on , by section 24(3) of the Governor-General Act 2010 (2010 No 122).
                                                          • Section RD 5(6)(a): substituted (with effect on 1 April 2008), on , by section 504(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                                                          • Section RD 5(6)(b): replaced, on , by section 141 of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                                                          • Section RD 5(6)(bb): inserted, on , by section 102 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
                                                          • Section RD 5(6)(bb): amended, on , by section 278 of the Veterans' Support Act 2014 (2014 No 56).
                                                          • Section RD 5(6)(bc): inserted, on , by section 102 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
                                                          • Section RD 5(6)(bd): replaced (with effect on 7 December 2014), on , by section 14(2) of the Taxation (KiwiSaver HomeStart and Remedial Matters) Act 2015 (2015 No 40).
                                                          • Section RD 5(6)(be): inserted, on , by section 14(3) of the Taxation (KiwiSaver HomeStart and Remedial Matters) Act 2015 (2015 No 40).
                                                          • Section RD 5(6)(bf): inserted, on , by section 14(3) of the Taxation (KiwiSaver HomeStart and Remedial Matters) Act 2015 (2015 No 40).
                                                          • Section RD 5(6)(bg): inserted, on , by section 14(3) of the Taxation (KiwiSaver HomeStart and Remedial Matters) Act 2015 (2015 No 40).
                                                          • Section RD 5(6)(bh): replaced (with effect on 1 April 2019), on , by section 179 of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
                                                          • Section RD 5(6)(c): substituted (with effect on 1 April 2008), on (applying for the 2008–09 and later income years), by section 122(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
                                                          • Section RD 5(6)(c): amended, on , by section 668 of the Education and Training Act 2020 (2020 No 38).
                                                          • Section RD 5(7) heading: replaced, on , by section 83 of the Parental Leave and Employment Protection Amendment Act 2016 (2016 No 8).
                                                          • Section RD 5(7): amended, on , by section 83 of the Parental Leave and Employment Protection Amendment Act 2016 (2016 No 8).
                                                          • Section RD 5(8) heading: added (with effect on 1 April 2008), on , by section 504(5) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                                                          • Section RD 5(8): added (with effect on 1 April 2008), on , by section 504(5) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                                                          • Section RD 5(8): amended, on , by section 138 of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).
                                                          • Section RD 5(9) heading: added (with effect on 1 April 2008), on , by section 504(6) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                                                          • Section RD 5(9): added (with effect on 1 April 2008), on , by section 504(6) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                                                          • Section RD 5(10) heading: inserted, on , by section 252(3) of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
                                                          • Section RD 5(10): inserted, on , by section 252(3) of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
                                                          • Section RD 5 list of defined terms accommodation: inserted (with effect on 1 April 2008), on , by section 504(7) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                                                          • Section RD 5 list of defined terms employee: inserted (with effect on 1 April 2008), on , by section 123(2) of the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Act 2014 (2014 No 4).
                                                          • Section RD 5 list of defined terms employer's superannuation cash contribution: inserted (with effect on 1 April 2008), on , by section 504(8) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                                                          • Section RD 5 list of defined terms income-tested benefit: repealed, on , by section 141 of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                                                          • Section RD 5 list of defined terms living alone payment: repealed, on (applying for the 2011–12 tax year and later tax years), by section 16(1) of the Social Assistance (Living Alone Payments) Amendment Act 2013 (2013 No 11).
                                                          • Section RD 5 list of defined terms main benefit: inserted, on , by section 141 of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
                                                          • Section RD 5 list of defined terms unrepaid PAYE income overpayment: inserted, on , by section 252(4) of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).