Sometimes you might want to pay an employee a specific take-home amount rather than working backwards from a gross figure. Here's how to handle this in PaySauce.
A word of caution before you start
We generally don't recommend agreeing to net amounts with employees. Here's why:
For bonuses, the gross amount you actually pay can vary drastically between employees depending on their personal deductions – someone with a higher KiwiSaver deduction rate or a student loan will cost you more to deliver the same take-home amount.
The same applies for salaries or wages. Even if you agree on a net figure, deductions like KiwiSaver, student loan, or child support will affect what the employee actually receives, which can lead to confusion or disputes down the track.
Where possible, it's cleaner to agree on gross amounts and let employees understand their individual deductions.
For bonuses or one-off payments
You can use the lump sum payment option and tick "this is a net amount". PaySauce will calculate the gross amount needed based on tax only – it won't factor in other deductions like KiwiSaver, student loan, or child support.
Refer to our article on paying bonuses for other general information on entering bonuses:
A quick heads up: because tax is normally calculated from the gross amount, working in reverse isn't always exact. There's a small chance the final net could be slightly different if the calculated gross pushes the payment into a different tax bracket or changes ACC earner levy eligibility. You will need to edit the gross amount until you arrive at the net value you want the payment to be.
For ongoing pay like salaries or hourly rates
If you need to work out a gross salary or hourly rate that will result in a specific take-home amount, we recommend using the IRD's PAYE calculator:
Work out PAYE deductions from salary or wages
This lets you factor in all the employee's deductions and find the right gross amount to enter in PaySauce. This calculator is designed only to work with PAYE deductions and shouldn't be used for lump sum/one off payments, as the rates are different.