Employee setup turns an approved hire into a correct first payment and a reliable long-term payroll record. An error at this stage can repeat every pay period and affect tax, KiwiSaver, leave, public holidays, reporting and final pay. The payroll manager should therefore treat onboarding as a controlled process, not a form-filling exercise.
This module follows a New Zealand employee from approved hire to the first completed pay run. It is written for payroll managers and specialists who work with HR, hiring managers and system administrators. It reflects official guidance available in September 2026. Apply the employee's actual agreement and current rules, and refer unusual legal or tax questions to the appropriate specialist.
Payroll should receive a controlled new-starter request from an authorised HR or hiring contact. The request should identify the employee, legal employer, work location, manager, start date, employment type, applicable agreement, pay terms, hours, cost centre and any approved allowances. It should link to supporting documents rather than ask payroll to infer terms from an email chain.
Agree a deadline that allows time to check the record before the first pay. A late hire still needs to be paid for work performed. Treat missing information as an exception and escalate it promptly; do not leave the employee unpaid merely because the internal handover missed a deadline.
HR or an authorised manager decides the terms of employment. Payroll translates those approved terms into system fields. Where a document and a request disagree, payroll should stop the affected setup field, identify the discrepancy, and seek a written resolution. A payroll officer should not choose a rate, employment type or contract interpretation by guesswork.
Search the existing payroll and HR systems for the person before creating a new ID. Check rehires, name changes and transfers between legal entities. A second employee number can split service, leave history, KiwiSaver records and reporting. A transfer to another employer is not necessarily the same as a new hire; obtain HR's legal and continuity instructions.
Employee, contractor or other engagement
Confirm whether the person is an employee before putting them on employee payroll. A contractor invoice, agency worker, secondee and direct employee may follow different processes. Since February 2026, a statutory gateway test can determine specified contractor status when all criteria are met; otherwise the common law assessment remains relevant. Payroll should flag uncertainty to HR and legal advisers rather than decide worker status from a system label.
Every employee must have a written employment agreement. Identify whether the employee is on an individual agreement or covered by a collective agreement, with the correct classification and effective dates. From 21 February 2026, a new employee no longer has to begin on collective terms for the first 30 days. Payroll must use the agreement HR confirms actually applies from the start.
Read the final agreement and approved schedules for salary or hourly rate, pay frequency, guaranteed or usual hours, ordinary work pattern, overtime, penal rates, shift or on-call allowances, commission, incentive terms, availability, shift cancellation and any other payroll-relevant provision. Record the document version and effective date. Do not assume a job title carries the same rate or rules as another employee.
HR should confirm whether a valid trial or probationary period is agreed and documented. Payroll normally records it for reporting or workflow purposes only; it does not change minimum wage, tax, leave or the right to be paid for work. A trial period cannot be added after the person starts merely by selecting a payroll flag.
Use the employee's legal name as required for payroll and Inland Revenue reporting, and record the preferred name separately where the system allows. Check date of birth if supplied, contact details, residential or postal address, IRD number, start date, legal employer and employee number. Apply the organisation's identity verification and privacy procedures. Avoid copying an identity document into the payroll system unless it is needed there.
Ask every new employee to complete a Tax code declaration, IR330. The employee chooses their tax code using Inland Revenue guidance; payroll records the declaration and applies the correct tax tables. Do not choose a tax code for the employee or reuse a code from an earlier employer without a current declaration. If information is missing, apply the current Inland Revenue rules for missing declarations and escalate the issue before the first pay where possible.
An IRD number should be checked for format and entered against the correct person. A transposed digit can cause reporting and tax records to be attributed incorrectly. Store the declaration securely and keep the version received.
Obtain bank details through an approved channel. Check the account format, effective date and whether the employee requested any split payment. A change to a bank account, especially close to payday, should require independent verification through a trusted contact method and a second approval where policy requires it. Do not accept a forwarded message as the only evidence for a high-risk change.
Assign the correct employing entity, business unit, site, department, manager, cost centre and general ledger code. These fields affect authority, reporting and sometimes employment terms. A person working at a client's site may still be employed by a different entity. Do not confuse physical workplace with legal employer.
Record the actual date employment starts. If the system has separate original service, continuous service, transfer and payroll start fields, use each for its intended purpose. Confirm the first pay period and payday. A mid-period start may require a partial salary calculation; the method must align with the agreement and the organisation's approved payroll rules.
For hourly staff, set the approved hourly rate and the applicable effective date. For salaried staff, set annual salary, pay frequency and agreed hours or work pattern. Check the system's salary-to-period conversion, particularly in a fortnight with a mid-period start or a public holiday. Record actual additional hours where required to assess minimum wage and other entitlements.
A person can hold two roles with different rates, cost centres or managers. Create separate job assignments or earnings codes where needed. Test how time enters payroll and how leave or public holidays will be calculated. A single default rate can underpay one role or distort cost allocation.
Set up only allowances that have an approved basis and effective date. Define whether each is fixed, per shift, per hour, reimbursable or conditional. Check how the item is treated for PAYE, KiwiSaver, gross earnings and leave calculations under the applicable rules. Keep commission and bonus plans with their approval and calculation method; avoid loading a recurring amount without its end condition.
Enter the IR330 tax code, IRD number and any current Inland Revenue notice or instruction affecting the employee. Verify student loan and other tax-code components from the declaration or notice. Payroll software applies tables based on configuration, but the manager should test unusual codes and ensure software updates are current.
If Inland Revenue sends an employer deduction notice, record its details and effective date, apply the required calculation and protect the information. Do not create a child support deduction from an informal request or carry a notice from a previous employer without a valid instruction. Review any protected earnings requirements under the current notice and rules.
Separate statutory deductions from voluntary deductions and employer recoveries. Obtain the legal authority and any required written consent before setting up a non-statutory deduction. Record amount or calculation, frequency, start and end dates, beneficiary and approval. A deduction to recover training, equipment or an overpayment needs a specific review; a manager's request alone is not enough.
Ask whether the employee is already a KiwiSaver member, on a savings suspension, or eligible for automatic enrolment. New employees aged 18 to 65 who meet the criteria generally must be automatically enrolled if they are not already members, subject to exceptions. Some employees, such as certain casual or temporary staff, are not automatically enrolled but may be able to opt in. Do not infer the answer solely from age or employment type; use Inland Revenue's current eligibility guidance.
For every new employee, complete the new employee and KiwiSaver details process, IR346K, through the approved channel. Inland Revenue says it can be submitted before the first payday or with the employment information containing the first pay. Ask existing members for a KS2 to establish their deduction rate or a savings suspension, and retain the notice before stopping contributions for a suspension. For auto-enrolled employees, provide the required KiwiSaver information pack within seven days of the start date and retain evidence.
From 1 April 2026, the default employee and matching employer contribution rates are 3.5%, subject to applicable elections, temporary rate reductions, exemptions and eligibility. Employer contributions may also be due for eligible 16 and 17 year old existing members. Configure ESCT on employer contributions under current Inland Revenue rules. Do not assume that every employee's chosen rate is the default, or that employer contributions can always be treated as additional to an agreed total remuneration package without checking the agreement.
An opt-out, rate change, temporary reduction, savings suspension or Inland Revenue notice can change the setup after first pay. Give each change an effective date and check the first affected payday. Retain the employee form or official notice and reconcile the deduction and employer contribution after processing.
Map the employee ID across HR, rostering, time and attendance, and payroll systems. Assign the right manager, site, shift pattern and approval route. Test one sample shift or entry before the first live pay. A new starter missing from the time system may work a full week with no payable hours arriving in payroll.
Enter the start date, agreed work pattern, relevant leave policy and any authorised prior-service or transfer treatment. Under the current Holidays Act framework, entitlement and payment calculations depend on accurate work and pay history. Do not pre-load a made-up leave balance simply to allow the employee to request leave. If a system displays estimated accrued leave, distinguish it from legal entitlement and approved leave in advance.
The Employment Leave Act 2026 is due to replace the Holidays Act in August 2028. During the transition, use the law currently in force for actual pay and leave, while keeping clean data for conversion. Do not apply future leave rules to a 2026 new starter's current pay.
Record the employee's actual pattern, not only full-time or part-time status. Days normally worked matter when assessing public holiday and certain leave entitlements. Variable or casual patterns may require a case-specific assessment. The setup should allow the pattern to change with a proper effective date and retain the earlier history.
Confirm the employee appears in payroll once, in the correct legal entity and pay group. Compare start date, days or hours worked, approved leave, base pay and allowances with the agreement and source records. For a mid-period start, recalculate the partial salary independently. Check that no automatic full-period salary or unearned allowance has been added.
Inspect the IRD number, tax code, PAYE, KiwiSaver deductions, employer contribution and ESCT, student loan and any valid notices or authorised deductions. Verify the destination bank account through the approved control. Compare gross-to-net results with a reasonableness expectation; do not regard a successful payroll calculation as sufficient review.
Employment information must be filed each time employees are paid. For electronic filing, Inland Revenue states that the information is due within two working days of payday. New employee details, including the IR346K process, must be reported by the required point around the first pay. Reconcile the payroll record with the filed information and resolve rejected or unmatched entries.
Provide the organisation's pay information or payslip in the usual way. Be ready to explain hours, rate, allowances and deductions. A first-pay query is valuable evidence that a setup field or onboarding explanation may need correction.
Escalate to HR immediately and record the missing document. Establish the terms that have been agreed and the work performed so the employee can be paid. Do not treat an unsigned draft as authoritative without confirmation. Follow up until the written agreement and payroll record are consistent.
Request the declaration promptly and use Inland Revenue's current rules for incomplete tax details. Do not invent an IRD number or select a favourable tax code for the employee. When a corrected declaration arrives, assess whether it changes future withholding or requires a filed-information correction under Inland Revenue guidance.
If the approved hiring instruction says $30 per hour and the signed agreement says $32, compare versions and effective dates and ask HR for a written resolution before finalising the pay rate. Preserve both documents and the resolution. If a short payment has already occurred, calculate and pay the difference and review related entitlements.
If the employee began work before payroll received the form, gather actual time, agreement and tax information urgently. Include the person in the proper pay run or use a controlled correction process. Do not conceal the earlier start date by entering the date the form reached payroll.
Limit access to personal and financial details according to role. Protect IRD numbers, bank details, addresses and deduction notices. Use approved channels to receive forms, set retention and deletion rules, and avoid duplicating sensitive documents across email, shared drives and the payroll application without a need.
One person can enter the new starter and another can verify critical fields. The checker should compare the record with source documents, not just review the data-entry screen. At minimum, independently check employee identity, legal employer, start date, agreement, rate, pay group, tax code, KiwiSaver status and bank account.
Retain the initial request, supporting documents, employee declarations, system change log, check sign-off and first-pay reconciliation. Record who changed a field, the old and new values, reason, authorisation and effective date. Keep wage and time and holiday and leave records for six years, including for employees who later leave.
An employee on an annual salary starts halfway through a fortnightly pay period. The payroll system proposes a full fortnight's salary. Check the actual start date and agreed work pattern, apply the approved partial-period method, and independently recalculate the gross amount. Test tax and KiwiSaver using the actual payday. Save the calculation and first-pay approval.
A new employee says they already belong to KiwiSaver and supplies a KS2 showing a chosen contribution rate. Do not auto-enrol them again. Record the rate, check for any savings suspension notice, set employer contributions and ESCT correctly, and submit the new employee details to Inland Revenue.
A new employee works administration at one rate on weekdays and weekend support at a different rate. Create the correct job and rate mapping, agree how time will be approved and split, and run a test timesheet. A single default role is not a safe substitute for the agreed terms.
A new starter's bank account is changed in an email the day before the first pay. Verify the request through an established contact route and use the organisation's independent approval control. If verification cannot be completed, escalate the payment timing and employee communication rather than silently changing the destination.
Employment terms
The legal employer, status, signed agreement or confirmed applicable collective, start date, role, rate, hours, allowances and effective dates agree across the documents and payroll record.
Employee and tax details
Identity and employee ID are correct, no duplicate record exists, IR330 and IRD number have been handled under current rules, and bank details have been verified through the approved process.
KiwiSaver and deductions
Membership and automatic enrolment have been assessed, IR346K and any KS2 or suspension notice are handled, rates and ESCT are correct, and every other deduction has a valid source.
Systems and pay
Roster and time mappings work, leave and work patterns are correct, the first gross-to-net calculation has been independently checked, payday filing has been completed and reconciled, and the employee can access their pay information.
Question 1
Can payroll use the hiring manager's email rate when it differs from the signed agreement? No. Resolve the discrepancy with HR, identify the valid term and effective date, then document the approved setup.
Question 2
Should an existing KiwiSaver member be automatically enrolled again? No. Obtain the KS2 and set up the existing membership and contribution rate correctly.
Question 3
When does an electronic payday filing obligation arise? Employment information is filed when employees are paid and is generally due within two working days of payday for electronic filers.
Question 4
Can a missing timesheet or late onboarding form justify no payment for work already done? No. Establish actual work and approved terms, pay correctly, and resolve the process failure separately.
Question 5
What is the most important control before releasing the first pay? An independent comparison of critical system fields and the actual first-pay result against the agreement, declarations, time records and approved instructions.
Official references
Employment New Zealand, Employment agreements: https://www.employment.govt.nz/starting-employment/employment-agreements
Employment New Zealand, Record keeping: https://www.employment.govt.nz/starting-employment/rights-and-responsibilities/record-keeping
Employment New Zealand, Employment Relations Act changes effective February 2026: https://www.employment.govt.nz/news-and-updates/employment-relations-act-changes-take-effect-today
Inland Revenue, Tax code declaration: https://www.ird.govt.nz/income-tax/income-tax-for-individuals/tax-codes-and-tax-rates-for-individuals/complete-my-tax-code-declaration
Inland Revenue, Starting employees in KiwiSaver: https://www.ird.govt.nz/kiwisaver/kiwisaver-employers/starting-employees-in-kiwisaver
Inland Revenue, Automatically enrol employees: https://www.ird.govt.nz/kiwisaver/kiwisaver-employers/starting-employees-in-kiwisaver/auto-enrol-employees-into-kiwisaver
Inland Revenue, KiwiSaver changes from April 2026: https://www.ird.govt.nz/kiwisaver-changes
Inland Revenue, Payday filing: https://www.ird.govt.nz/employing-staff/payday-filing
Inland Revenue, Filing employment information electronically: https://www.ird.govt.nz/employing-staff/payday-filing/filing-employment-information-electronically
Review tax rates, KiwiSaver rules, forms and payroll software settings whenever Inland Revenue updates them. Use the version in force on the relevant payday.
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