ESCT & FBT changes from 1st April 2025

As of 1st April 2025, employer superannuation contribution tax (ESCT) and fringe benefit tax (FBT) thresholds have changed & calculation methods also changed.

ESCT is an employer’s contribution to an employee’s KiwiSaver scheme.  ESCT is the tax that is deducted from this contribution.

You will need to check you have the most up-to-date version of payroll software.  You need to work out the ESCT rate for each employee.  This rate will depend on how much your employee earns and how long they have worked for you.

New ESCT thresholds                                        Tax rate

$0 - $18,720                                                      10.5%

$18,721 - $64,200                                              17.5%

$64,201 - $93,720                                              30%

$93,721 – $216,000                                           33%

$216,000 upwards                                            39%

FBT Changes

The new FBT thresholds took effect from 1st April 2025.  You will need to apply a new alternate tax rate calculation method for the first time.  This new rate applies from 1st January 2025 and is for final quarter returns.  The rate you choose depends on whether the benefit must be attributed to a particular employee, and whether you want to calculate FBT every quarter or only once a year.

New FBT thresholds                                          Tax rate

$0 - $ 13,962                                                     11.73%

$13,963 - $45,230                                              21.21%

$45,231 - $62,450                                              42.86%

$62,451 - $130,723                                            49.25%

$130,724 upwards                                            63.93%

Other rate changes

Any annual rate increases which took effect on 1 April 2025 (for example, the ACC levy rate) will also be in the most up-to-date version of your payroll software as well as the updated PAYE deduction tables.

You can check out the changes here: www.ird.govt.nz/income-tax-changes