Search

RewardPay Review - The Definitive New Zealand Guide

If you want to earn free business and first class flights by paying IRD and ACC bills with an American Express card, RewardPay is the first (and only) service in New Zealand to offer this. Our guide explains the costs, pros and cons, key facts and frequently asked questions
Updated 4 November 2024

Summary 
  • RewardPay is a service that lets you pay the IRD, ACC and other business bills (e.g. suppliers, landlords, contractors, tax pooling) with an American Express credit card. As the IRD and ACC only accept Visa and Mastercard Debit and Credit Cards via myIR, RewardPay gives business owners with an American Express card the option to use it to pay ongoing IRD and ACC bills following a very similar process.
  • RewardPay is suitable for business owners who want to earn rewards (specifically American Express Reward Points) by using their card for IRD, ACC and everyday expenses instead of bank transfers (or using a Visa or Mastercard debit or credit card).
  • RewardPay charges a fee to the payer (e.g. person making the payment), which adds to the total cost of the transaction. This is 1.67% for IRD and ACC payments and 2.35% for general expenses. However, as these amounts are pre-tax, the after-tax costs (and arguably true out-of-pocket) for IRD and ACC payments fall to as low as 1.01% for 39% PAYE earners. For companies the cost is 1.20% (IRD & ACC) and 1.69% (other expenses) based on companies paying 28% tax on profit.
  • Know This: Whether or not you use RewardPay will depend on how useful and valuable Membership Reward Points are to you.

To help you decide on whether RewardPay is valuable to you, our guide covers:
Important: What are the points worth?
  • In a simple case, a business owner paying $100,000 of GST and $200,000 of PAYE costs per year would pay $5,010 in RewardPay fees (1.67% of $300,000).
  • This spend would generate 600,000 Membership Reward Points, which translates to 300,000 Qantas Frequent Flyer Points, 200,000 Singapore Airlines Krisflyer Points, 300,000 Cathay Pacific's Asia Miles, or 5,093 Airpoints Dollars. The transaction's true 'after tax' cost is $3,607 (for 28% company taxpayers) or $3,056 (for 39% PAYE taxpayers).
  • With 300,000 Qantas/Asia Miles points equating to a return Auckland to Europe business class flight (worth approx. $10,000 - $12,000), RewardPay has a clear advantage of rewarding business owners who use the points for valuable flights.
  • In preparing this review, we confirmed with American Express that business owners could use any personal AMEX card for general business purposes. In addition, further Membership Rewards points can be earned outside the IRD and ACC payments as part of everyday card use.
  • Beyond the points or miles being earned, cashflow is also an important benefit for many small business owners who want an interest-free line of credit.

Our View:
  1. If you're unsure whether or not RewardPay is suitable for you and you're not invested in earning Amex points, likely, RewardPay isn't for you.
  2. Many New Zealand business owners already use a credit card to pay IRD and ACC, manage cash flow and, in some cases, earn points. RewardPay is aimed at business owners who want to earn enough reward points from everyday business costs to fly themselves and family members to and from Europe in business or first class with top-tier airlines such as Qantas, Singapore Airlines, Qatar Airways and Cathay Pacific.
  3. If this doesn't sound like you, then RewardPay isn't suitable as a service.
  4. If there's a risk you'll be unable to make the credit card repayments on time and/or you have a history of late credit card payments, the interest costs incurred make using RewardPay uneconomic and best avoided. The service is for cashflow-positive businesses with sufficient working capital to meet the needs of their day-to-day operations well ahead of any payment deadline.   

The table below shows the fees charged upfront, and then after-tax using the company tax rate of 28%.
Organisation to Pay
Single payment amount
Rate % After Tax Rate
IRD & ACC
1.67%
1.20%
Other (Landlord, Suppliers, Contractors etc)
2.35%
1.69%
MoneyHub Founder Christopher Walsh explains how earning flights with RewardPay works in the video below:
A rewards-specific video is published to help prospective RewardPay customers understand the costs vs the value received for Qantas and Singapore Airlines business class travel:

What is RewardPay? Can I Trust it?

RewardPay was first set up in Australia in 2016 before expanding to New Zealand in 2022. The company offers one service – paying IRD and ACC bills using an American Express credit card and earning Membership Reward Points.

All payments are protected by American Express' chargeback policy and paid directly to the IRD or ACC. Therefore, the balance you owe to either the IRD or ACC will reduce with every payment made - RewardPay advises that payments made before 5pm will be applied the next day.

What fees does RewardPay charge? What are the benefits?

RewardPay charges 1.67% (IRD and ACC) and $2.35% (other expenses) on top of the balance owed. For example, if your IRD GST bill is $10,000, your AMEX will be charged $10,167, and you'll earn 20,334 Membership Reward Points.
​
Know This: There is no annual fee, nor is there a minimum transaction fee. Therefore, you can spend as little or as much as you like as long as your American Express card has a sufficient limit.

Can I earn Air New Zealand Airpoints Dollars with RewardPay?

Yes, but you'll need the the American Express Airpoints Card. However, the value of earning Airpoints Dollars is significantly lower than using Membership Rewards Points-earning credit cards. For example, a $200,000 annual spend with the IRD will earn 200,000 Asia Miles (enough for a return Auckland to London in business class or 2,857 Airpoints Dollars. Therefore, while Airpoints are more flexible, Qantas' program offers better value for premium reward flights (subject to availability).

Can I use a Visa or Mastercard to pay IRD and ACC bills?

What American Express Card is Best for RewardPay?

American Express has two business credit cards - the Gold Business Card and Business Card which are geared towards business owners who prefer these cards over consumer cards (outlined below).

With regards to consumer cards, from our rewards credit card research, American Express offers two top-earning cards – one earns Membership Rewards points ($1 spent = 2 points), and one earns Airpoints Dollars ($70 spent = 1 Airpoints Dollar). Each card has a specific annual fee, travel and insurance benefits and other perks. You can read more about these cards here:
Our view is simple – unless you want to accumulate Air New Zealand Airpoints Dollars, the Membership Rewards-earning cards offer far better value and flexibility. This is because you can convert the points to many airline programs and advance book first or business class flights to hundreds of destinations from Auckland. Air New Zealand Airpoints Dollars can only be used on Air New Zealand-operated flights or via partner airlines using the partner-specifc convoluted booking process, which regularly blocks business and first class availability.

Beyond IRD & ACC Payments - Paying Suppliers, Landlords, Contractors and More

Update - In August 2024, RewardPay upgraded its offering and can now be used to pay suppliers, landlords and anyone who doesn't accept AMEX.

Full Details:
  • RewardPay has launched an expanded service that allows businesses to use their American Express card to pay suppliers who typically don't accept Amex, such as those who only accept bank transfers.
  • By doing so, business owners can make everyday payments using their AMEX card for rent, contractor fees, tax obligations, tax pooling intermediaries and other expenses. This extension extends RewardPay's current service, which allows customers to pay IRD and ACC fees using their AMEX.

This improvement increases the value of RewardPay's service in two ways:
  • You will earn AMEX Membership Rewards Points or Airpoints Dollars: You continue earning valuable Amex Membership Rewards Points or Airpoints Dollars on payments typically made via bank transfer.
  • Improved cash flow: By using your AMEX card instead of relying on a line of credit, you can better manage your business's cash flow while maximising rewards.

The cost of using RewardPay depends on the vendor:
  • IRD payments: 1.67% (or 1.20% after tax deductions)
  • Other payments: 2.35% (or 1.69% after tax deductions)

Here's an example to clarify how this works:
Suppose you use RewardPay to make a $10,000 rent payment. At the standard 2.35% fee, your total charge would be $10,235. However, after factoring in company tax deductions, your real cost would be $10,169. This reduction reflects the after-tax benefit of using the service, making it more cost-effective for businesses when paying suppliers or bills. The Points and Cash Flow benefits are explained in detail in the FAQs below.

New Features in the RewardPay Portal:
RewardPay has introduced several updates that enhance user experience:
  • Scheduled and Future Payments: You can now set up payments for a later date, giving you flexibility and control over your cash flow.
  • Multi-User Accounts: Businesses with teams can assign access to different users within the portal for seamless management.
  • KYC: There's a Know Your Customer (KYC) setup process for non-government payments. RewardPay has streamlined this process to make it as simple as possible for businesses to complete.

Our View: We like what RewardPay is doing, and this enhancement makes managing cash flow easier and more cost-effective if you can put as much (or everything) on your AMEX as possible. Our research into Lines of Credit and Business Loans confirms the high cost of short-term debt - AMEX and RewardPay make this much cheaper with up to 55 days interest-free and a set percentage upfront fee per transaction.

RewardPay has supplied our research team with two videos focusing on hospitality and construction business owners and their experiences with how RewardPay works in their industry. We suggest watching these to better understand how businesses like yours benefit from this service and contacting RewardPay for any further details.

We suggest watching two videos RewardPay have published to see how this works: the first is specific to a trade business, while the other relates to a restaurant.

Tax Benefits and Consequences of using RewardPay

MoneyHub is not an accountant; this information is not business or financial advice. The 'after-tax rates' shown in the above schedule assume your business is profitable and you are paying tax on business profits or PAYE.
  • When you use RewardPay, you reduce your taxable profit by the amount of the fee (as this is a cost going out of the business). For example, with company tax at 28% and the top PAYE level being 39%, deducting RewardPay as a business expense is equivalent to a 28%, 39% (or whatever top marginal tax rate you pay) reduction in the cost of the points being earned.
  • However, as the Membership Rewards Points or Airpoints Dollars are not taxed, there is a significant benefit to using an American Express card.

RewardPay – Pros and Cons

Pros:
  • Earn Membership Reward Points or Airpoints Dollars on everyday IRD and ACC bills – you'll earn at the highest rate each card offers, with no cap or limit to how many you can earn.
  • Free up working capital and cash flow – using an American Express to pay the IRD or ACC gives you up to 51 additional cash flow days for your business (when compared to paying by bank transfer)
  • RewardPay fees are only incurred on a transaction, so there's no annual fee. All fees are tax-deductible, but you can use your rewards without incurring any fringe benefits tax.
  • Value for money when using an American Express (vs Visa or Mastercard) – The IRD and ACC accept debit and credit Visa and Mastercard cards, with a respective 1.42% and 1.90% 'convenience' fee. However, given RewardPay charges 1.67% for IRD and ACC payments, the benefits of using an American Express card are significant (in terms of rewards generated from points earning) given the 2022 law change scaling back Visa and Mastercard reward earning rates on credit card spend.

Cons:
  • If you don't have a use for Air New Zealand Airpoints dollars, business class or first class flights for you and your family, then RewardPay has less appeal. However, it can still be used to manage cash flow.

Tips for New Cardholders Using RewardPay:
If you apply for an AMEX card to use RewardPay, there are some considerations to be aware of:
  1. Build a Payment History: Before making large payments, it's crucial to establish a history of smaller, regular transactions with your AMEX card. This helps build trust with the issuer and avoids sudden stops or restrictions on your account, which will likely happen without a payment history.
  2. Be Aware of Acceptance: AMEX cards are not universally accepted around New Zealand, so you'll need to plan your spending and payments accordingly and ensure you have alternative payment methods if necessary. Our guide to AMEX acceptance has more details.
  3. Prepare for Large Payments: If you plan to use RewardPay for significant tax payments, consider starting with smaller amounts to gradually increase your payment history. This approach signals to AMEX that your account is active and reliable.
  4. Pre-pay When Necessary: For substantial amounts, especially in the early stages of your card usage, you may need to pre-load funds onto your card. This is crucial if you have a looming deadline, as AMEX can take up to three days to credit payments to your account.
  5. Understand Credit Limitations: New accounts may not have the flexibility for high credit extensions immediately. You'll need to talk to AMEX before any tax payment due date and/or about your intended uses to understand potential credit limits and solutions.
  6. Plan Ahead for Rewards: If earning Membership Reward Points is a significant reason for using your AMEX with RewardPay, ensuring that your payment strategy aligns with the card's terms and financial plans is essential. Unexpected reductions in credit can significantly impact the rewards earned.
  7. Allow Processing Time: Always allow extra time for processing payments, especially around critical payment due dates like tax deadlines.

Most suitable RewardPay users:
  • Business owners who already use a Mastercard or Visa credit card to pay IRD and/or ACC bills. RewardPay charges similar fees and offers a lot more reward-earning potential.
  • Sole traders and owners/operators of limited liability companies with $100,000+ spend a year in IRD and ACC bills. At this level, you can comfortably start earning significant rewards.  
  • A partner in a small to medium-sized professional services firm who is comfortable paying IRD and ACC costs on their personal credit card. Again, doing this will help boost rewards.

Frequently Asked Questions

What bills can I pay with RewardPay?

Merchants, suppliers, contractors, landlords, the IRD and ACC, among anyone else who you wish to pay using your RewardPay service.

Can I use RewardPay for payroll?

Yes, you can use RewardPay for payroll, provided your business has a New Zealand Business Number (NZBN) and is paying contractors. Additionally, RewardPay can be used to pay your employees’ PAYE payroll tax.

Can I use RewardPay to pay tax pooling intermediaries?

Yes, RewardPay now allows you to use your American Express card to pay tax pooling intermediaries. This enhancement is part of their expanded service, enabling you to earn rewards and manage your cash flow when paying suppliers who don’t typically accept AMEX.​

What are the benefits of using RewardPay compared to traditional payment methods?

Using RewardPay offers two key advantages:
  1. Cash Flow Flexibility: Your AMEX card, which functions as a short-term line of credit, offers up to 55 days of interest-free credit. This is especially valuable for managing cash flow without incurring high interest rates, as seen with traditional loans or lines of credit.
  2. Earning Points: When using RewardPay, you earn AMEX Membership Rewards Points or Airpoints Dollars (depending on the card) for payments that would typically be made via bank transfer.

Is the cost of RewardPay worth it for my business?

The value of RewardPay is best understood when comparing the cost of the service against the rewards you gain:

For instance, a business owner paying $100,000 in GST and $200,000 in PAYE annually would incur $5,010 in RewardPay fees (1.67% of $300,000). This spend would generate:
  • 600,000 Membership Rewards Points, translating to 300,000 Qantas Frequent Flyer Points, 200,000 Singapore Airlines Krisflyer Points, 200,000 Qatar Airways Avios, or 5,093 Airpoints Dollars.

After-tax deductions, the true cost of this transaction is:
  • $3,607 for companies paying 28% tax
  • $3,056 for businesses with a 39% tax rate

With 300,000 Qantas points or 200,000 Qatar Airways Avios equating to a return business class flight from Auckland to Europe (valued at approximately $10,000 - $12,000), RewardPay delivers substantial value, especially for businesses prioritising travel rewards.
​

What do I need to set up an account with RewardPay?

You will need to provide the following:
  • Business name
  • An NZBN
  • New Zealand bank account number
  • Phone number and address
  • Email address to send a payment confirmation to

How does RewardPay make money?

While RewardPay is a private company, it takes a margin on the fee it charges cardholders to pay by American Express and what it pays American Express as a merchant. Hypothetically, as the ACC fee is 1.67%, RewardPay may have negotiated to pay American Express 1.50% on any ACC payments and books 0.17% of all ACC payments as revenue to help cover its overheads. This is an example; we have no insights into how RewardPay operates as a business.

What if RewardPay goes bust? Is the payment I made to the IRD or ACC going to go through, or am I an unsecured creditor of RewardPay?

RewardPay has been operating for nearly a decade, is debt free and, most importantly, has been profitable for many years. Furthermore, customer payment amounts are separate from RewardPay revenue and are not used in running RewardPay.

How do I join RewardPay? How much does it cost?

You can click here to sign up. There are no joining, setup or ongoing costs – you only pay a fee, which is a fixed percentage of an IRD or ACC bill, every time you use the service.

Who can use RewardPay?

Any New Zealand Business with a New Zealand business number (NZBN); sole traders can also use it as they have a NZBN.

Does RewardPay accept Visa or Mastercard?

No - RewardPay is only for American Express cardholders.

What American Express credit cards does RewardPay accept?

RewardPay accepts any New Zealand-issued American Express card. You can see all American Express cards on offer here.

How do I make a payment to the IRD and ACC? Is payment immediate?

To pay the IRD, you will need your IRD number and payee code. To pay the ACC levy, you will need the Account name, policy number and reference. Payments will always be paid out the next business day; our research team asked RewardPay about the speed and they responded saying it has "been thoroughly tested with IRD and ACC" and then confirmed "if transacting on a Friday the payment won’t be sent to the IRD until the Monday".

Are payments considered a cash advance on my credit card?

No – all payments made using RewardPay are considered a standard transaction, meaning up to 51 interest-free days apply, and you'll earn Membership Reward points.

How does RewardPay ensure my credit card is secure?

Credit cards are securely stored using encryption in your RewardPay wallet. RewardPay also tokenises all payments.

Our Conclusion

RewardPay isn't for everyone, but it will work for businesses of any size and scale. With the IRD and ACC unwilling to accept payment by American Express, RewardPay is the only service to pay IRD and ACC bills using an AMEX card.
Related Guides