It's a salary a company pays to a working shareholder for the work they do in the business. It's deductible to the company and taxed to you personally at the individual tax rates. In a small company it's often paid as an end-of-year shareholder salary with tax paid through provisional tax, rather than through PAYE each payday.

No, not on its own. The 28% applies to profit you leave in the company, but it's not the final tax. When you later take that money out as a dividend, it carries an imputation credit for the 28% already paid and is topped up to your personal marginal rate. So leaving profit in the company defers tax, it doesn't avoid it.

Be careful here. Adding family members as shareholders to shift income to a lower tax rate can be caught by New Zealand's income attribution rules, which can reallocate the income back to the person who actually did the work. Income splitting is not a free pass, and it's an area where getting advice first matters.

No. Calling a payment a "loan" doesn't make it tax-free. If you take money out of the company that isn't genuinely a loan — with proper documentation like a loan agreement and current-account records — IRD can treat it as wages or dividends and tax it accordingly. Regular drawings that look like income, with no paperwork to show they're loan repayments, are especially likely to be recharacterised as taxable income. So a loan from your own company isn't a way around PAYE or tax; it has to be a real, documented loan.