Income Tax In New Zealand

On this page, you’ll learn:

• if you need to register for tax in New Zealand    • how to register for tax    • New Zealand’s income tax rates
• how income tax rates have fallen in recent times    • what documents you need to file    • when to pay the tax you owe


New Zealand’s IRD

Tax collection is carried out by New Zealand’s Inland Revenue Department, which prefers to be known as ‘IRD’ not ‘the IRD’.

If you have to contact them, you’ll usually do this by phone. The staff you’ll talk to are trained to be friendly and helpful; but they’re definitely not infallible.

As you might expect from any large organisation, the quality of information you get can vary. If you’re in any doubt about anything you’ve been told by phone, call again and speak to another IRD representative – it’s free.

Also, if you have any doubts about what you’ve been told, ask whoever you’re dealing with to send you a booklet about your particular query. If you write with your query, and request a written response, you should get a written answer – but it will take longer. IRD prefers telephone or online transactions.

Registering with IRD

If you live in New Zealand and you earn income, you must register with IRD for tax.

To do this you need an Inland Revenue Department Number (IRD Number). You don’t pay to get this.

How do I get my IRD number?

To get your IRD Number, you start by filling out an IR595 form.

Once you’ve done that, you need to prove your identity. To do this, take your completed IR595 to an AA Driving Licensing Agent or a Postshop.

You’ll need two supporting documents and a photocopy of each supporting document. Acceptable supporting documents are typically a passport (with New Zealand Immigration visa/permit if applicable) and a driving licence.

The Licensing Agents or Postshop will send your application to IRD and you should receive your IRD number within 8 – 10 working days.

Do I need to register if I don’t work?

Even if you have no income and pay no tax, there’s a good chance you’ll still need an IRD number.

You’ll need an IRD number to register for family assistance, apply for child support, or register for a student loan.

If you receive any interest – on money in a bank account, for example – the interest will be taxed and your bank will need your IRD number.

Income Tax Rates In New Zealand

New Zealand’s tax year runs from the 1st of April to the 31st March. Here are the tax bands:

Income Tax Rates 2013 – 2014

Your Income Tax You Pay
$0 – $14,000 10.5%
$14,001 – $48,000 $1,470 plus 17.5% of any income in the range $14,001 – $48,000
$48,001 – $70,000 $7,420 plus 30% of any income in the range $48,001 – $70,000
$70,001 upwards $14,020 plus 33% of income over $70,000

A little more information

  • If you have children, you may qualify for assistance – see Family Assistance.
  • If you live overseas and have a bank account in New Zealand, the tax rate on the interest is 10% or 15% depending on where you live.
  • All employees are taxed under the Pay as you Earn (PAYE) system, which means that the correct amount of tax is deducted from your wage before you get it.
  • To ensure you pay the correct tax during the year, your employer will give you a tax code. For your main source of employment or sole employment your tax code should be ‘M’ or ‘ME’. You can check that you are on the correct tax code by using this IRD tax code flowchart.
  • Employees will also have a small levy called an ACC earners’ levy deducted from their wages. For 2012-13 the rate is 1.7% of earnings. Self-employed people may have to pay a higher ACC levy.
  • New Zealanders currently pay 10.5% tax on the first $14,000 of income; this is the lowest rate for over twenty years.
New Zealand Income Tax Rates Over Time
tax rates changing with time
New Zealand tax rates have varied over the past few decades. The top rate of tax has remained below 40%. Currently New Zealanders pay 10.5% tax on the first $14,000 of income and a maximum of 33%; this is the lowest overall rate for over twenty years.

Will I need to file any documents with IRD?

Usually, you are not required to file if:

  • You had no income during the tax year, or
  • The income paid by your employer and/or your bank has already had the correct amount of tax deducted during the year, and
  • You or your partner have not received any family assistance payments

If you need to file with IRD, it will be either a Personal Tax Summary (PTS) if you are a salary/wage earner or an IR3 if you receive other income.

When do I use an IR3?

For people receiving other income – for example rental income, self-employed income or overseas income, see our IR3 page.

When do I use a personal tax summary (PTS)?

A personal tax summary (PTS) is an income and tax ‘square up’ for salary and wage earners. It shows the income you’ve received and your tax deductions for the year. Your PTS tells you if you’ve overpaid your tax and are due a refund, or underpaid your tax and have tax to pay.

If your income is solely from employment, New Zealand interest or New Zealand dividends you will need to file a PTS for a tax year if:

  • You or your partner received Working for Families Tax Credits from IRD
  • You or your partner received Working for Families Tax Credits from Work and Income and earned over $36,827 (2010 year onwards)
  • You used the wrong tax code
  • You used a special tax code
  • You have a student loan and haven’t had enough money deducted from your income
  • You have received interest over $200 taxed at the incorrect rate for your earnings

For a complete list of reasons see this PTS form.

You’ll receive your PTS automatically in some circumstances otherwise you can contact IRD and they will send one out to you.

Please note that you can request a PTS even if you do not need one. However, it is a binding calculation, so if it turns out that you owe tax, you must pay it. It may be safer if you are not required to receive a PTS to do a check first to see if you are due a refund before you ask for one.

When Do I Pay My Tax?

If you receive a PTS and have income tax to pay, the due date is the 7th February following the end of the tax year. For example, for the 2013 tax year ending on 31 March 2013, income tax must be paid by 7 February 2014.

If you’re unable to pay all of the tax you owe, Inland Revenue may agree to payments by instalments. It is best to contact Inland Revenue before the date your tax is due to set up an instalment arrangement, as this reduces any extra charges.

Did you know?

There is no gift duty in New Zealand, so any gifts received, including money, are not taxable and do not have to be declared to Inland Revenue.

New Zealand also has no death duties, inheritance taxes or stamp duties on property or share purchases.

Last Updated: July 2013


Comments

  1. An interesting, not very welcome issue to be aware of – if you have NZ PR or citizenship and then you leave, your whole foreign income will be taxed (dual taxation) not only while you are there but for the following 3 years, including the untaxed personal allowance segment in the UK. So costs of the connection can continue to be high.

    • Hi again Pat,

      In general terms, for typical UK citizens, if you leave NZ and return permanently to the UK, you will most likely become non-resident in NZ. IRD has a form available – IR886 – which is a questionnaire that allows IRD to determine your tax residence status.

      As a non-resident, you will be taxed in New Zealand only on any NZ income that you may still have, such as rental income from NZ property or interest from NZ savings. You will also have to declare your NZ income to the UK Inland Revenue, but you will get a tax credit in the UK for any NZ tax you have paid.

      If you have no NZ income then, as a NZ non-resident, you won’t have to pay any NZ tax.

  2. I would like to know if there is a way to get IRD number before moving to NZ.
    I have recently got NZ residency and wants to transfer funds to kiwi bank, but they must need IRD number. I have checked IRD website and they ask for postal address and photo id, I can post photo id but I don’t have any address in NZ.
    Is there any solution to this.
    thanks in advance

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