Tax on income $70k

[farhanahmad]

Sorry guys am not a math guy. i find it hard to do even simple calculations. Can anybody tell me what would be the income tax on gross salary of $70k in NZ?
Thanx.

[Shrub Tub]

NZ has a simple formula..
Below $70K = 30%
Above $70K = 33%

[IanW99]

Below $70K = 30%
Above $70K = 33%

NZ has a simple formula, but it isn't quite that simple...

Income up to $14000 taxed at 10.5%
Income over $14000 up to $48000 taxed at 17.5%
Income over $48000 up to $70000 taxed at 30%
Remaining income taxed at 33%

For $70,000 the tax for the coming year would be $14,020.00

You can use Tax Calculator if the math is too difficult.

Ian

[72andsunny]

NZ has a simple formula..
Below $70K = 30%
Above $70K = 33%

That's the same mistake every one of my coworkers makes...it is not that simple. NZ's tax rate is marginal! Only your income over 70k is taxed at 33%, not everything you make. That the formula you posted above is so pervasive in this country says something about the culture--don't make more money, you just end up taking home less.

Note: you have also left off ACC levies, which effectively are an income tax. There's a nice table here: http://www.ird.govt.nz/how-to/taxrat...etaxrates.html

By my math, tax + ACC=
First $14,000: $1708
$14000-$48000: $6528
$48000-$7000: $6974
Total is $15,210, leaving you with $54,790.

There are a few other factors that reduce your tax liability (like children)...

Note: I'm am by no means an accountant or even at all skilled on the subject, so please obtain your own tax advice elsewhere.

[farhanahmad]

Thanx 72andsunny, Ianw99.
Yeah i was also going through the same webpage (http://www.ird.govt.nz/how-to/taxrat...etaxrates.html) and got really confused by the examples given on the page.
Thanks for the clarification.

[Bozeman]

That's the same mistake every one of my coworkers makes...it is not that simple. NZ's tax rate is marginal! Only your income over 70k is taxed at 33%, not everything you make. That the formula you posted above is so pervasive in this country says something about the culture--don't make more money, you just end up taking home less.

Note: you have also left off ACC levies, which effectively are an income tax. There's a nice table here: http://www.ird.govt.nz/how-to/taxrat...etaxrates.html

By my math, tax + ACC=
First $14,000: $1708
$14000-$48000: $6528
$48000-$7000: $6974
Total is $15,210, leaving you with $54,790.

There are a few other factors that reduce your tax liability (like children)...

Note: I'm am by no means an accountant or even at all skilled on the subject, so please obtain your own tax advice elsewhere.

How do you reckon that children reduce your tax liability?

[72andsunny]

How do you reckon that children reduce your tax liability?

Tax credits! In the OP's case (making $70k a year), he would need two children to make it Working for Families worthwhile: http://www.ird.govt.nz/resources/9/4...e7d5/ir271.pdf

[G-Mo]

Tax credits! In the OP's case (making $70k a year), he would need two children to make it Working for Families worthwhile: http://www.ird.govt.nz/resources/9/4...e7d5/ir271.pdf

Yup!

[Shrub Tub]

Its good to know that....

[Bozeman]

Tax credits! In the OP's case (making $70k a year), he would need two children to make it Working for Families worthwhile: http://www.ird.govt.nz/resources/9/4...e7d5/ir271.pdf

Thanks. I had no idea that those credits were available at that level of salary.