2025 End of Tax Year Updates
The End of the Tax Year is upon us, and it’s time to prepare for the upcoming changes taking effect on April 1st. This year brings a few more updates than usual, so it’s important to stay informed and ensure you and your team are prepared.
Take a look at the key points below, make note of any changes that might impact you, and see how you and your staff may be affected
Minimum Wage Update
Starting April 1st, the Adult Minimum Wage will increase from $23.15 to $23.50, and the Training Rate and Starting Out Rate will rise from $18.52 to $18.80.
To help ease the transition, we’ve automatically updated the Adult Minimum Wage for staff paid between $23.15 and $23.49, effective April 1st.
However, please note that changes to the Training Rate and Starting Out Rate will need to be manually adjusted, as these updates are not handled automatically by the system.
ACC Earners’ Levy
Attention salaried staff! From April 1st, the ACC Earners’ Levy is increasing from 1.60% to 1.67%.
As this forms part of the PAYE calculation, any employees who receive consistent pay each period may notice a slight decrease in their take-home pay.
Additionally, the ACC Earners’ Levy Threshold will rise from $142,283 to $152,790, meaning the levy will no longer apply to earnings above this threshold.
Student Loan Repayment Threshold – No Changes for 2025
The Student Loan Repayment Threshold will remain the same this year at $24,128 per year.
Here’s how it breaks down:
- If you’re paid weekly, repayments begin at 12% of every dollar above $464.
- If you’re paid fortnightly, repayments start at $929.
- For those paid every 4 weeks, the threshold is $1,856.
- And if you’re paid monthly, it’s $2,010.66.
Make sure to keep this in mind as you manage payroll and repayments.
ESCT Rate Brackets Updates – Action Required
The ESCT Rate Brackets have been updated for the new Tax Year, effective from April 1st.
Below is a comparison of the old and new brackets:
| Old Bracket | Rate | New Bracket | Rate |
| $0 – $16,800 | 10.5% | $0 – $18,720 | 10.5% |
| $16,801 – $57,600 | 17.5% | $18,721 – $64,200 | 17.5% |
| $57,601 – $84,000 | 30% | $64,201 – $93,720 | 30% |
| $84,001 – $216,000 | 33% | $93,721 – $216,000 | 33% |
| $216,001 upwards | 39% | $216,001 upwards | 39% |
To ensure compliance, ESCT rates should be updated once a year, ideally at the start of the Tax Year.
How to Update ESCT Rates in Crystal Payroll:
- Complete your final pay period for the current Tax Year (prior to April 1st). Note that this should be the final payment date before April 1st, not the period date.
- Navigate to “Company Settings” – “Payroll Settings” – “Advanced Settings” – “KiwiSaver, Superannuation & SWSAS Settings”.
- Select the “ESCT Yearly Reset” option to apply the updates.
Final Entitlement Payment – It’s technical, but you don’t need to worry
Here’s a technical update that’s good to know but likely won’t impact your workflow much in practice.
Until now, Final Entitlement Payments were treated as lump sum payment calculations, alongside payments such as Annual Bonuses, Cash-up Entitlements, and Employee Share Schemes. Lump sum payments are calculated by estimating annual income based on the past four weeks’ earnings, multiplied by 13. However, starting April 1st, Final Entitlement Payments will have their own dedicated tax rules.
The calculation will now be based on the employee’s past two pay periods’ income instead of four weeks. Pay periods are determined by your payroll schedule. For example, this could mean two weeks if you’re weekly, four weeks if you’re fortnightly, a month if you’re semi-monthly, eight weeks if you’re four-weekly, or two months if you’re monthly.
There’s no need to worry, as Crystal Payroll will automatically apply these new rules for Final Entitlement Payments. Just keep in mind that this change introduces a distinct tax calculation method for these payments.
Wrapping Up the Tax Year – We’ve Got You Covered!
This Tax Year brings plenty of updates, and staying informed is the key to smooth payroll management. At Crystal Payroll, we’re here to help you navigate every change with ease.
Count on us to keep your payroll Crystal Clear, so you can focus on what truly matters—running your business with confidence.
