NZ Payroll Software Comparison 2026: Best Options for New Companies (Xero Payroll vs PayHero vs iPayroll)

Setting up payroll correctly in your first month avoids penalties, tax arrears, and ACC levy disputes later. New Zealand has payday filing requirements (since 2019), KiwiSaver obligations, and ACC employer levies - all of which your payroll software must handle automatically. Here is a practical comparison for new NZ company directors choosing their first payroll system in 2026.

NZ Payroll Compliance Requirements

Before comparing software, understand what every NZ payroll system must do:

• Payday filing: submit PAYE details to IRD within 2 working days of each payday (or within the payday filing period for smaller employers)
• KiwiSaver: deduct and remit employee contributions (minimum 3%); contribute employer contributions (minimum 3%)
• ACC employer levy: calculated on liable earnings; filed with your tax return
• Employment information: name, IRD number, tax code, gross earnings, PAYE deductions for each employee each period
• Holiday Act compliance: 4 weeks annual leave, alternative holidays, public holidays - NZ's Holiday Act is notoriously complex

The Main Options

Xero Payroll (built into Xero)

If you are already using Xero for accounting (which most NZ accountants recommend), Xero Payroll is the default choice. It is included in Xero's Grow plan and above (NZ$80+/mo).

• Payday filing direct to IRD
• KiwiSaver, PAYE, student loans, child support all handled
• Leave management (Annual, Sick, Bereavement, Public Holidays)
• Fully integrated with Xero accounting - journal entries automatic
• Employee self-service app
• Holiday Act compliance tools (but check your specific situation - Holiday Act complexity is real)

Best for: businesses already on Xero wanting minimal setup. Not a separate subscription.

PayHero

PayHero is a NZ-built standalone payroll system with a strong reputation for Holiday Act compliance. Starts at NZ$14/month for up to 2 employees.

• Strong Holiday Act engine - designed specifically for NZ complexity
• Payday filing
• Leave management with automatic alternative holiday calculation
• Integrates with Xero, MYOB, and other accounting platforms via export
• Good for casual and variable-hours staff

Best for: businesses with variable hours, casual staff, or complex leave situations where Holiday Act compliance is a priority.

iPayroll

iPayroll is an established NZ payroll provider used by many small and medium businesses. Pricing starts around NZ$20-30/month for small teams.

• Payday filing
• KiwiSaver, PAYE, student loan, child support
• Leave management
• Integrates with Xero and MYOB
• Phone support included - useful for new employers

Best for: small businesses wanting reliable NZ-focused payroll with phone support.

SmartPayroll

SmartPayroll (now part of MYOB) is well-established in NZ. Pricing varies; often bundled with MYOB plans.

• Full NZ compliance (payday filing, KiwiSaver, ACC)
• Strong MYOB integration
• Suitable for MYOB AccountRight users

Best for: businesses already using MYOB for accounting.

What to Consider as a New NZ Company

For most new NZ companies with 1-5 employees, the decision comes down to your accounting platform:

• Using Xero? Start with Xero Payroll - it is included and seamlessly integrated.
• Using MYOB? SmartPayroll or iPayroll.
• Variable or casual staff? Consider PayHero for better Holiday Act handling.
• Not sure on accounting yet? Ask your accountant - most NZ accountants prefer Xero and will set it up for you in the first month.

The First Payroll Checklist

Before running your first payroll in NZ:

1. Get your employer IRD number (separate from your company IRD number if needed)
2. Set up as a payday filer with IRD (myIR)
3. Have each employee complete a Tax Code Declaration (IR330)
4. Set up KiwiSaver deductions and employer contributions
5. Confirm your ACC industry classification (affects your employer levy rate)
6. Set up the employment agreement with correct pay rates and leave entitlements

Get Help From a Payroll Specialist

Getting payroll wrong costs more than getting it right. A good NZ bookkeeper or accountant can set up your payroll system, configure all deductions correctly, and train you on the process in 2-3 hours. FreshFirms connects new NZ companies with local accountants, bookkeepers, and payroll specialists.

Find a payroll-specialist bookkeeper near you or find an accountant who can set up Xero Payroll.