NannyOra NZ payroll guide

Nanny Payroll Software NZ: PAYE, IR56 & DIY Guide

Compare nanny payroll software, a payroll provider and DIY in New Zealand. Understand PAYE filing, IR56, KiwiSaver, leave records and household-employer responsibilities.

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Software vs DIY

IR56 decision guide

Leave and record checks

Official NZ sources

Nanny payroll starts with worker status—not software

Before calculating PAYE, decide what the working relationship really is. The same person cannot be treated as an employee for some rights and casually called a contractor to avoid other obligations.

Regular in-home nanny care often has employee features because the household sets the location, recurring hours and duties and expects the nanny to perform the work personally. However, each arrangement needs to be tested under current New Zealand law. The statutory contractor gateway test has applied since 21 February 2026; if all of its criteria are not met, the common-law tests determine the true nature of the relationship.

Read Employment New Zealand’s current employee-or-contractor test and document the conclusion. The nanny contract guide explains how the status decision affects the written agreement.

Employee, IR56 eligible

The nanny remains an employee but uses the special private-domestic-worker process to calculate, file and pay their own PAYE and applicable deductions.

Employee, household payroll

The family is the employer and generally registers with Inland Revenue, makes deductions, files employment information and pays the nanny net wages.

Genuine contractor

A self-employed business invoices for services and manages its own tax. This route is only appropriate when the actual facts meet the legal tests.

IR56 is not contractor status

Inland Revenue expressly says an IR56 worker pays tax on wages or salary and cannot be an IR56 worker if self-employed. Keep the employment-law analysis separate from the question of who sends PAYE to IRD.

When a nanny may be an IR56 private domestic worker

IR56 is designed for certain workers who are employees but handle their own PAYE. Inland Revenue includes qualifying part-time nannies in the private domestic worker category.

All four conditions must apply

The nanny works in the employer’s private home.
The work is not related to a business operated by the employer.
The employer pays the nanny directly.
The nanny does not work more than 30 hours a week on average for each employer.

Hours are tested for each employer. Inland Revenue gives the example that a domestic worker can exceed 30 total hours across several households and still qualify when they do not exceed the threshold for any one employer. By contrast, if the nanny works more than 30 hours on average for one household, that household is responsible for PAYE under the current guide.

An eligible nanny registers as an IR56 worker, calculates their own PAYE and other applicable deductions, files employment information and pays Inland Revenue. Current IRD guidance says monthly employment information is due within 10 working days after the end of the month in which payment was received, and payment is due by the 20th of the following month. Confirm those dates rather than relying on a saved checklist. See IRD’s private domestic worker criteria and IR56 obligations.

What the family should still do

Put gross pay, hours, leave and expenses in the employment agreement; pay the agreed gross amount on time; keep evidence of hours and payments; make sure the nanny understands who handles PAYE; and revisit the decision if weekly hours or the way care is delivered changes.

When the household needs to run employer payroll

If the nanny is an employee and does not qualify for IR56, the household generally takes on the normal employer payroll role. More than 30 average weekly hours for one household is an important trigger, but other facts can also prevent IR56 eligibility.

1
Confirm worker status
Decide whether the real relationship is employment or genuine contracting under current New Zealand tests. Do not use tax convenience to choose the label.
2
Test the IR56 conditions
If the nanny is an employee, check whether every private-domestic-worker condition is met. Record the answer, especially average weekly hours for this household.
3
Set up the correct payer
Either the eligible nanny registers and follows IR56, or the household registers as an employer and runs PAYE. A genuine contractor invoices and manages business tax.
4
Connect the employment agreement
Configure gross pay, guaranteed hours, pay cycle, leave, public holidays, additional hours, reimbursements and authorised deductions from the signed agreement.
5
Run and review every pay
Approve hours, calculate gross-to-net pay, file on time, make payments, update leave and preserve detailed records. Recheck the setup whenever hours or status change.

Typical employer setup tasks

Register as an employer with Inland Revenue before required deductions and filings begin.
Collect the employee’s IRD number, tax-code declaration and relevant KiwiSaver information securely.
Configure the employee’s gross rate, pay cycle, ordinary hours and lawful deductions.
Track actual days and hours, including additional hours and public-holiday work.
Calculate gross pay, PAYE and other deductions using current rates or compliant NZ payroll software.
Pay net wages and agreed reimbursements to the correct bank account.
File employment information and pay employer deductions by the current deadlines.
Update leave balances and retain the underlying records.

For electronic payday filing, Inland Revenue currently requires employment information within two working days of each payday. Check IRD’s payday filing page because deadlines and processes can change.

Nanny payroll software NZ: software, provider or DIY?

A payroll tool can reduce admin, but it cannot make the employment-status decision or repair incomplete timesheets. Choose a workflow only after you know whether the household runs employer payroll or the nanny uses the IR56 route.

DIY in myIR

The household prepares the pay calculation and files employment information itself. Inland Revenue allows employers to enter employment information through myIR, so software is not a legal requirement.

Payroll software

The household enters and approves the underlying hours and pay data in a New Zealand payroll system. Some products can create payroll records or help file information, but confirm the exact capability before relying on it.

Payroll provider or bureau

An authorised provider may calculate, process or file on the household’s behalf. Confirm the approval process, responsibility for corrections and ongoing access to records before signing up.

Inland Revenue says employers can file employment information through an online myIR form, by uploading a payroll file, or directly through payroll software. Electronic employment information is generally due within two working days of payday. Read IRD’s current payday filing guidance for the available filing methods and deadlines.

A provider does not become the employer

The household should still check the nanny’s correct status, approve the hours and pay, fund the wages and deductions, keep the required records and respond when the arrangement changes. A payroll provider works from the information it is given; it cannot decide the facts of the employment relationship for you.

When DIY may be manageable

DIY can suit a simple, consistent arrangement when the household has time to learn the current process, keeps daily hours and leave records carefully, and can meet each filing and payment deadline. It is not simply a matter of transferring the same amount every fortnight: changes to hours, leave, public holidays, tax codes or KiwiSaver still need to be recorded and treated correctly.

When software or a provider can be worth considering

Families often seek payroll software or a provider when the schedule is variable, school-holiday hours are different, public-holiday calculations apply, leave balances need regular attention, deductions change, or they want a clearer repeatable record. It can also be useful where more than one adult administers the household. These are practical reasons to seek support, not a rule that every nanny arrangement requires a paid product.

Questions to ask before choosing a payroll provider

Does it support the correct New Zealand payroll route for this arrangement, including the filing method you will use?
Can it record the actual days and daily hours worked, not only a total payment?
How does it handle variable schedules, annual holidays, sick leave, public holidays and alternative holidays?
Can it clearly separate wages from approved mileage, reimbursements and other expenses?
Who enters the hours, approves each pay, files employment information and corrects an error?
Does the service support the KiwiSaver information and deductions that apply to the actual payroll route?
Can you download complete wage, time, holiday, leave and filing records if you change provider or the employment ends?
What authority or access is needed for myIR, and how will the provider protect the nanny’s personal and bank information?
What is included in the fee, and what is the support process for an unusual pay period or a correction?

Inland Revenue advises people choosing a digital service to confirm with the provider that it meets their needs. Do not select a product because it promises “easy payroll” alone; check the workflow against your real care schedule and the terms in the written nanny agreement. The nanny cost guide can help you budget software or provider fees separately from the nanny’s pay.

This is general information, not a recommendation of a particular payroll product. If the arrangement is unclear or complex, obtain current advice from Inland Revenue, Employment New Zealand, ACC or an appropriately qualified New Zealand adviser before the first pay.

From agreed nanny rate to net pay

Start with the gross wage in the signed agreement. Gross pay is not the amount the nanny receives after deductions, and reimbursements for genuine work expenses should not be confused with wages.

Build gross earnings

Ordinary paid hours, additional hours, paid leave, public-holiday entitlements, allowances and any other taxable payment must be classified correctly for the period.

Apply lawful deductions

PAYE may include tax and the ACC earners’ levy. KiwiSaver, student loan, child support or other amounts can apply. Non-statutory deductions generally require a lawful basis and written consent.

Keep expenses separate

Record approved mileage, parking, children’s activities and purchases with receipts or another agreed process. Do not expect the nanny to fund routine family costs from net wages.

Pay and explain the result

Pay on the agreed day and give a clear breakdown of hours, gross pay, deductions, reimbursements, net pay and relevant leave information.

Do not compare platform fees with nanny wages

NannyOra membership or booking charges are separate from the nanny’s gross pay and household employment costs. Review current NannyOra platform pricing independently, then build a total childcare budget that includes wages, leave, payroll support, KiwiSaver or ACC obligations where applicable, mileage, activities and backup care.

Leave, public holidays and changing schedules

Payroll must reflect employment rights and the nanny’s actual work pattern. Part-time and IR56 status do not erase employee entitlements.

Record when annual-holiday entitlement dates arise and what leave is taken and paid.
Track sick leave and other statutory leave where eligibility requirements are met.
Identify otherwise working days before calculating public-holiday entitlements.
Record hours worked on a public holiday and any alternative-holiday balance.
Use the correct holiday-pay calculation for variable or changing hours.
Update payroll when guaranteed hours, regular days or the employment type changes.

Do not add 8% automatically

Pay-as-you-go annual holiday pay is lawful only for defined types of employment and must be agreed and shown correctly. A person being called “casual” or working part-time does not automatically make 8% the right method. Check Employment New Zealand’s current holiday guidance or use a payroll professional.

KiwiSaver and ACC in a nanny arrangement

These obligations depend on the worker and payroll route, and rates change. Use current official calculators rather than copying a percentage from an old article.

KiwiSaver

A household running employer payroll needs to check whether a new employee is already a KiwiSaver member, whether automatic enrolment applies, what deductions are required and whether compulsory employer contributions apply. Inland Revenue’s KiwiSaver for employers page contains the current process and rates.

Private domestic IR56 workers use a different joining and reporting pathway. IRD says they opt in directly with a provider and include applicable KiwiSaver amounts with their IR56 employment information. Use the dedicated IR56 KiwiSaver guidance for the current responsibilities of both parties.

ACC

PAYE commonly includes the ACC earners’ levy, while employer or private domestic worker circumstances can also produce ACC Work levy responsibilities. The payer, classification and amounts depend on the arrangement. Review ACC’s levy guidance for employers and private domestic workers or ask ACC to confirm the correct account treatment.

Nanny timesheets, records and payslips

Good records are the evidence that the nanny was paid and received leave correctly. A bank transfer alone does not show which hours, deductions or entitlements produced the amount.

Each day worked and the actual number of hours worked that day.
Ordinary, additional, overnight, travel and public-holiday hours as applicable.
Gross wages for each pay period and how they were calculated.
PAYE, KiwiSaver, student loan, child support and any other deduction or contribution.
Reimbursements, mileage, allowances and the supporting approval or receipt.
Annual holidays, sick leave, other leave and alternative-holiday balances and payments.
Employment agreement, variations, tax forms and relevant KiwiSaver notices.
Filed employment information and proof of payments to the nanny, IRD or providers.

Employment New Zealand says wage and time, holiday and leave records must be kept for six years, even after the employee leaves. Tax and KiwiSaver records may need to be kept for seven years. Read the official record-keeping requirements and design your system for all applicable retention periods.

Payslips are good practice

Although a payslip is not generally mandatory, a clear statement each payday helps both sides check the gross pay, hours, deductions, reimbursements, net pay and leave. The employee can request access to required wage, time and leave records whether or not a payslip was issued.

A practical nanny payday checklist

Use this operational sequence for each pay period, adapting the filing steps to IR56 or household-employer payroll.

Approve the nanny’s daily hours and resolve any discrepancy before calculation.
Add paid leave, public-holiday treatment, allowances and approved additional hours.
Separate genuine expense reimbursements from gross wages.
Calculate current PAYE and other deductions using the correct tax code and official rules.
Calculate any applicable KiwiSaver employer contribution or other employer amount.
Pay gross wages for IR56 or net wages for employer-run payroll, as the correct route requires.
Provide a clear pay breakdown and update leave balances.
File employment information and pay deductions by the applicable deadline.
Store the timesheet, calculation, payment and filing evidence securely.
Reassess status if hours, payer, location or the nature of the working relationship changes.

When to use a payroll professional

Get tailored help when status is uncertain, hours cross the IR56 threshold, pay varies materially, the nanny works overnight or travels, the family provides accommodation, there are multiple employing adults, historic records need correction, or employment is ending with complex leave balances.

Frequently asked questions

It depends on the arrangement. A nanny who meets every condition for an IR56 private domestic worker calculates, files and pays their own PAYE and other deductions. If the nanny is an employee who does not qualify for IR56, the household employer will generally need to register, deduct and report payroll amounts. A genuine contractor manages their own tax, but contractor status must be legally correct.

IR56 is a tax process for certain employees, including qualifying part-time private domestic workers. The nanny must work in the employer’s private home, do work unrelated to the employer’s business, be paid directly by the employer and work no more than 30 hours a week on average for each employer. They register with IRD and manage their own monthly obligations.

No. Inland Revenue says an IR56 worker pays their own tax on wages or salary and cannot be an IR56 worker if they are self-employed. IR56 changes who handles PAYE; it does not by itself make the nanny a contractor or remove employment rights.

If a private domestic employee works more than 30 hours a week on average for one employer, they do not meet that IR56 condition. Inland Revenue’s current guide says that employer is responsible for PAYE and other deductions. Check the full facts and register as an employer where required.

New Zealand does not generally require every employer to issue a payslip, but employers must keep complete wage, time, holiday and leave records and show them to the employee on request. A clear payslip is good practice and reduces misunderstandings.

Employment New Zealand says wage and time, holiday and leave records must be kept for six years. Tax and KiwiSaver records can have different or longer requirements—Inland Revenue’s guidance commonly requires seven years—so build the system to meet the longest applicable period.

Employees receive statutory leave and holiday rights when the relevant eligibility rules are met. IR56 employees are still employees. Do not assume every casual or part-time arrangement can simply add 8% holiday pay; that method is lawful only in defined situations.

Not necessarily. A household employer can submit employment information in myIR without buying software. Payroll software or a payroll provider can be useful when hours, leave, public holidays, deductions or filing become harder to manage. The family still needs to supply accurate information, check the results and meet employer obligations.

A payroll provider or intermediary may be able to file or manage payroll when the household gives the appropriate authority. Confirm exactly what the service files, who approves each pay, where records are kept and what access you retain. Using a provider does not decide whether the nanny is an employee, IR56 worker or genuine contractor.

Look for a New Zealand payroll workflow that suits your actual pay pattern and can record daily hours, leave, public-holiday work, deductions, reimbursements and the reports you need. Ask the provider whether it supports the correct payday-filing route, how it handles changes and corrections, what records you can export, and what you still need to review yourself.

An eligible IR56 worker is responsible for their own monthly PAYE and related filing obligations. Software may help organise calculations or records, but it does not move those obligations to the household or turn the worker into a contractor. Follow Inland Revenue’s current IR56 instructions.

NannyOra is a discovery and matching platform, not the household employer. Families and nannies must establish the correct worker status and payroll route. Use Inland Revenue, Employment New Zealand, ACC or a New Zealand payroll professional for advice on the individual arrangement.

Build the care arrangement on clear numbers

Find a nanny whose experience and availability fit, agree the role in writing, then use the correct New Zealand payroll pathway.

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