Payroll compliance in New Zealand is complex, with payday filing, KiwiSaver contributions and the Holidays Act all needing to be accurately calculated every pay run. For small New Zealand businesses evaluating their options in 2026, Smartly consistently comes out on top.

It’s purpose-built for Kiwi compliance requirements, straightforward to use without specialist knowledge and trusted by over 22,000 New Zealand businesses.

This guide covers what to look for and how the main options compare.

Key takeaways:

• The best payroll software for small NZ businesses automates PAYE, KiwiSaver and IRD payday filing

• Smartly is a popular payroll option purpose-built for NZ SMEs, rather than an accounting platform with payroll added on

• Xero and MYOB both include payroll modules, but they're primarily accounting tools

• NZ's Holidays Act makes leave calculations especially complex, so it’s important to use specialist software that takes the guesswork out of payroll and helps avoid costly errors

• Smartly starts from just $2.60 per employee, per pay run, plus a platform fee of $51.50 per month.

Payroll software for small NZ businesses needs to handle a specific set of local requirements that overseas-built tools often get wrong. These are the top things to look for:

Since 2019, every NZ business has been expected to file employment information with IRD each payday. Your software should do this without any extra steps from you.

Employer KiwiSaver contributions, employee deductions and Employer Superannuation Contribution Tax (ESCT) need to be calculated and paid correctly every pay run.

NZ's Holidays Act is widely regarded as one of the most complex pieces of employment legislation in the world. Getting annual leave, sick leave and public holiday calculations right (especially for employees with variable hours) is where many businesses fall short.

Income tax, ACC levies and student loan deductions need to be calculated accurately for every employee, every pay run.

When something goes wrong on payday, you need someone you can contact quickly who understands NZ payroll, not an offshore helpdesk on a different timezone.

Here's how the main options compare on the features that matter most for small businesses:

Xero and MYOB are accounting platforms that include payroll as a feature. Smartly is a dedicated payroll product that integrates with your accounting software.

A dedicated tool handles edge cases (like variable hours, mid-period wage changes and complex leave scenarios) more reliably than an accounting platform's payroll module.

Smartly works alongside both Xero and MYOB, so switching your payroll software doesn't mean you have to change your accounting platform.

Smartly has been making payroll simple for Kiwi businesses since 2004.  Here are the specifics that matter for a small business.

On payday, Smartly can automatically your employees, file with IRD, handle KiwiSaver contributions and update your records. There's no separate bank login or manual IRD filing required.

It’s easy to make costly mistakes with Holiday Act calculations. Smartly handles annual leave, sick leave, bereavement leave and public holidays in line with NZ employment legislation, and updates automatically when legislation changes (for example, when the minimum wage changes each April).

According to a 2022 consumer survey by an independent research agency, Smartly has the highest-rated customer support among NZ payroll providers. Phone support is available from 8am to 6pm, Monday to Friday, staffed by a Kiwi-based team who know NZ payroll inside out.

Payroll data is sensitive. The Smartly product  is certified against ISO27001  (the international standard for information security management) and backed by Datacom, New Zealand's largest IT company.

Smartly plans are charged on a monthly subscription basis, plus a fee  per employee, per pay run. You can switch plans or leave at any time.

Xero is the accounting tool of choice for many small NZ businesses, and many assume its built-in payroll is the natural companion.

Xero Payroll covers the compliance basics (including payday filing, PAYE and KiwiSaver) but it's a module within an accounting platform, not a purpose-built payroll product.

The practical differences show up with complexity such as  irregular hours, variable leave entitlements and mid-period wage changes.

Smartly handles these complexities smoothly. Its dedicated NZ payroll support team is available by phone, whereas Xero's support is primarily online.

Smartly integrates directly with Xero, so many NZ businesses run both: Xero for accounts, Smartly for payroll.

Read the full Smartly vs Xero Payroll comparison.

MYOB has a long history in NZ and suits businesses already embedded in the MYOB ecosystem. As with Xero, its payroll is an add-on to an accounting platform rather than a dedicated payroll tool.

Smartly integrates with MYOB,  via CSV file, so switching your payroll doesn't require changing your accounting software.

Read the full Smartly vs MYOB comparison.

Smartly's DIY Payroll plan is charged at $2.60 per employee, per pay run, plus a $51.50 per month platform fee (excluding GST). There's no fixed term contract and you can switch plans at any time.

If you want Smartly to run payroll on your behalf, the Managed Payroll plan starts from $365 per month. A dedicated account manager handles everything and you just approve the pay run.

People Management (Smartly's HR admin module covering digital onboarding, employment contracts and secure document storage) is available for $10 per employee per month.

For most small and medium NZ businesses, Smartly is the best payroll software. It's purpose-built for NZ compliance (automated payday filing, KiwiSaver and Holidays Act calculations) and is backed by Datacom, New Zealand's largest IT company.

More than 22,000 Kiwi businesses  currently use it, and it holds the highest customer support rating among NZ payroll providers (according to a 2022 independent consumer survey).

The essential requirements are:

• Automatic payday filing to IRD
• Correct Holidays Act leave calculations
• KiwiSaver processing
• Integration with your accounting software
• NZ-based phone support

If you're a first-time employer, ease of use is crucial. Look for software designed for business owners, not payroll specialists.

Yes. Smartly works for businesses from one employee upwards, with no minimum commitment and no contract. If you've just taken on your first staff member and want to get payroll right from the start (PAYE, KiwiSaver, payday filing, the lot) it's a practical and affordable starting point. Setup typically takes 3 to 15 business days.

Smartly is one of the most commonly used Xero Payroll alternatives in New Zealand. It integrates directly with Xero, so you keep your accounting in Xero and run payroll through Smartly.

Other alternatives in the NZ market include PaySauce, PayHero, iPayroll and Crystal Payroll, most of which also integrate with Xero.

Book a free demo with Smartly to see how it works for your business, or sign up online and be up and running in as little as three business days.