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Ngā utunga tōpū Lump sum payments


Lump sum payments – also called extra pay – include:

  • annual or special bonuses
  • cashed-in annual leave
  • retiring or redundancy payments
  • payments for accepting restrictive covenants
  • exit inducement payments
  • gratuities (tips)
  • back pay
  • back paid holiday pay
  • lump sum holiday pay
  • employee share scheme benefits.

Overtime or regular payments are not lump sum payments.

You must deduct PAYE on lump sum payments. How you work out the PAYE depends on your employee’s tax code.