The decrease in the number of redundancies lowered the total payout from last year, $40.4 million. The cost was $7.8 million in 2008.
The average redundancy payment increased to $50,650 from $45,749 in 2011.
The number of public servants under the Helen Clark-led Labour Government in June 2008, before National came into power, was 45,934. It jumped during John Key's first year as Prime Minister to 47,052 before dipping this year to 45,444.
The IRD lost more staff through redundancies than the combined total of four departments which merged in July to make the Ministry of Business, Innovation and Employment. The Department of Labour, Ministry of Economic Development, Ministry of Science and Innovation and the Department of Building & Housing made 95 staff redundant and paid out a total of $4,104,813. The departments had 3009 staff.
An IRD spokesman said restructuring at regional sites had led to about 90 redundancies from Invercargill, Nelson, Rotorua, Napier and New Plymouth offices. He said most had occurred in the last quarter so "any savings have yet to be realised".
But Labour's state services spokesman, Chris Hipkins, said the redundancy bill had not saved taxpayers money as it coincided with an increase in consultants and contractors, costing more than $125 million.
The redundancies had taken a toll on frontline services with an increase in call waiting times.
"National promised New Zealanders they would shift resources from the back office to the frontline, but that just hasn't happened. We've seen frontline staff cut in vital areas like biosecurity while bureaucracies like the Treasury have expanded.
"Massive restructuring at the IRD is clearly taking its toll. Their call centre performance is woeful.
"Under National we're seeing a lot of public services centralised in Wellington. This Government is hollowing out our regional towns and cities. It's no wonder so many Kiwis from provincial areas are heading over to Australia."
The average redundancy payment was $60,301 and the cutbacks were made across a range of positions including in management.
Revenue Minister Peter Dunne told the Herald: "These things are never done lightly, because they impact on people's lives.
"However, Inland Revenue, like every part of the Public Service, needs to be efficient and focused on the challenges of today and those challenges are changing. Every organisation - private or public - needs to respond and make sure it has the right skills and offers the right services in the best ways possible. For Inland Revenue, that is about better and more efficiently serving taxpayers. That is what the transformation programme has been about."
He said the redundancies were not to blame for recent privacy breaches.
The commission's survey showed the Education Review Office was the oldest department with an average age of 56 years, while the Ministry for the Environment was the youngest at 39 years.
The Ministry of Social Development took the most amount of time off in sick or domestic leave days with an average of 9.2 while the State Services Commission appeared the healthiest with an average of 1.2 days taken.
The Labour Department had the highest percentage of Asian employees at 17. Te Puni Kokiri (the Ministry of Maori Development), Pacific Island Affairs, and Women's Affairs had the highest numbers of Maori, Pacific Islanders and women respectively.
The biggest department was the Ministry of Social Development, with 9193 full-time employees, and Women's Affairs had 23.
Member of a loyal team
Suzanne Green feels as though she has had several careers - despite working for the same Government department for 34 years. The 51-year-old started working for the New Zealand Customs Service straight out of school in 1978 at the age of 17.
Her roles have included working at the airport as a Customs officer, inspecting goods at the wharf, training others, working in the call centre and managing the complaints section. It has seen her travel around the country, and live in Auckland, Wellington and Napier. She is now an operations manager, based in the Auckland Customs House in the city.
Alongside Foreign Affairs and Trade, the department had the most loyal staff based on the average number of years worked at 13, according to the State Services Commission's latest Human Resource Capability Survey.
Land Information New Zealand was the next highest at 12 years, followed by the Department of Conservation, the Government Communications Security Bureau and the Inland Revenue Department which all had 11 years.
Women's Affairs and the Serious Fraud Office had the smallest average tenure at three years, followed by the commission itself, the former Ministry of Science and Innovation and the Ministry for the Environment. The overall average public sector tenure was nine years.
Customs had four redundancies in the year to June - one of the lowest for a Government department.
There are at least 100 more Customs staffers who have worked for the department longer than Ms Green. A "Dad's Army" list has the names of 50 people who have been there the longest. Another "reservist" list had 50 names. Suzanne Green does not yet feature on either list.
She said she never felt the urge to move on and had made life-long friends within the department.
