Inland Revenue has issued a rare Revenue Alert highlighting serious concerns around employers failing to pass on PAYE deductions. Given how infrequently these alerts are released, this signals a significant compliance risk for employers.
Issued: 16 March 2026
The alert focuses on situations where employers deduct PAYE and other amounts from employee wages but fail to remit those funds to Inland Revenue by the required due date.
Employers are legally required to pass on all PAYE deductions, along with any other payroll-related amounts, within the prescribed timeframes.
Failing to pay deducted PAYE to Inland Revenue is not just a compliance issue—it is treated as a serious offence.
Employers who make deductions and do not pass them on may face criminal penalties, including:
The Revenue Alert makes it clear that Inland Revenue will consider prosecution where this behaviour is identified.
For more detail on this Revenue Alert, you can access the full guidance from Inland Revenue.
Managing PAYE obligations and payroll compliance can be complex, particularly where issues arise or processes need review. Our team can support you with practical guidance to reduce risk and ensure your obligations are being met.
We can assist with reviewing payroll practices, identifying potential areas of exposure, and providing advice on how to address any issues early—before they escalate.
For tailored support, contact our HR Advice team at hradvice@businesscanterbury.co.nz.