How is the 60% Protected Earnings calculated for Child Support Deductions

Child support and protected net earnings

If you’re deducting child support from an employee's pay, the maximum amount of child support you can deduct is 40% of their net earnings (after-tax). This is called ‘protected net earnings’.

Protected net earnings are usually only affected if you’re paying an employee less than their usual pay, for example, if they take unpaid leave.

Protected net earnings only apply to child support. Other deductions should still be made even if these add up to more than 40% of their pay.

For more protected net earnings information, download the Employer's guide - IR335 below.

If the child support deduction IRD asks you to make is more than 40% of your employee's net pay, you should only deduct 40% of their net pay amount. IRD will arrange with your employee to pay the balance, so you do not need to make up the missing amount in future pays.