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  • Writer's pictureCaleb Chung

Understanding Late Payment Penalties for GST and PAYE

Late payment penalties for GST and PAYE start from the day after the payment due date.


Penalties for late payments can be given in 3 stages:


  • 1% penalty on the day after payment due date

  • 4% penalty for remaining tax including penalties on 7th day after payment due date

  • 1% penalty every month the remaining tax including penalties is unpaid.


IRD can stop late payment penalties if you set up an instalment arrangement with the IRD. Reach out to an accountant if you need to set up an arrangement with the IRD.


In relation to PAYE there are two further penalties if you don't pay your PAYE on time called the non payment penalties.


The non-payment penalty is 10% of the overdue amount. If you still do not pay, another 10% penalty will be added each month an amount remains unpaid.


When you pay the unpaid amount or enter into an instalment arrangement, the last 10% penalty given will reduce to 5%.

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