You must have one of the following to accurately calculate base pay. You cannot use the IRD summary alone

• Payslip clearly stating annual base salary

• Employer Letter/Contract confirming base salary or hourly rate and minimum hours per week.
  The employer letter cannot state average hours, it must be ‘minimum’

• 3x payslips that show the exact same amount of income every pay cycle - annualise this figure

• Payslips regularly showing ‘ordinary hours’ or similar wording. For example, if the payslip shows ‘Ordinary hours - 40 x $26ph’ and then all other payments are on top of things like bonuses, overtime, meal allowances etc, then we can take 40 x 26 = $1,040 per week or $54,080PA as the base pay

For this you will need

• 12 month IRD summary

• Base salary already calculated
  
  This also requires that the client has spent 12 months with the same employer on their IRD.

  If 12 months are not completed, we can only use base salary.

  How to calculate

1. Take the base salary. For our example, we will use $79,007 gross per year.

2. We take our figure from the IRD summary. In our example, let’s use $87,856.
   
   Important Note: This is not the figure on the first page of the summary. It is the figure under ‘salaries and wages’ for that employer.
   

3. The calculation is -

   (figure from IRD summary - base salary = gross annual overtime)

   $87,856 - 79,007 = $8,849 gross annual overtime

Requirements

• Client has worked the role for 2 years

When the client is not on a permanent contract, we must use the average of the last 2 years income, according to their IRD summary to determine their income.

This doesnt have to be tax years, it can be 2 years from todays date.

It is not scaled further and is used at 100% in the calculator.

You will need

• Last 2 years financials

• IR4 if in a company

• IR3, IR7, or IR10 if in personal/trust names

Before beginning, take note of the owners as per companies office/annual report. If the client is only one of two owners with equal holdings, then only take 50% of any numbers calculated below.

Take out any shareholder salaries or directors fees and include those at 100%, assuming they relate to your client.

Include all business loans in servicing and provide 3 months statements for each, even though we are not using interest deductions.

Self Employed Calculator - contractors & self employed.

Complete this to calculate expenses.

FAQ's Here

Kiwibank do not accept projections, no negotiation on that