Tax Rates

[dreamer12]

Hi

I was researching on IRD web site about the tax rates and got a little confused. Looks like the tax percentages were changed recently. Can someone from NZ help me understanding how to arrive at the take home salary from the gross salary (e.g if you earn 60000 a year how much will u take home each month?) And also what is "Earners' levy"?

Thanks in advance

[hoping2win]

T think you would pay roughly $ 235 per WEEK in tax (varies according to your status, single married kids etc., plus 2 or 4% in KIWI SAVER (Compulsory superannuation) and a little more for accident insurance (ACC -earners levy). Note Health insurance is not included in this, only if you have an accident. The earners levy varies according to the perceived danger of the work you do (hope you are not a forestry worker, haha)

[GrumpyGoat]

NZ has a progressive flat tax. Everyone pays the same.
Here is a link to the tax rate table

On $60,000 you would pay:
---12.54% (tax of 10.5% + 2.04 ACC levy) on the first $14,000 you earn

($1755.60)

---19.54% (tax of 17.5% + 2.04 ACC levy) on $14,001-$48,000

($6643.40)

--- 32.04% (tax of 30% + 2.04 ACC levy) on the $48,001-$60,000

($3844.48)


So on $60,000 pa, the total tax and ACC levy would be $12,243.48

Net take home pay = $47,756.52


If you have children, you could apply for a tax credit but it is paid back to you separately and is calculated based on income and number of children.


Hope that helps!

[GrumpyGoat]

ACC earner's levy is the money that funds the accident coverage. ACC covers any person on NZ soil if they are hurt in any kind of accident. Tourists or workers--everyone is covered.

If you are off work here due to the accident, it will pay a portion (80% I think) of your salary.

It is like disability insurance. Funded by the ACC earner's levy.

[GrumpyGoat]

Sorry---just realized that you wanted take home pay.

Most in NZ are paid weekly so your weekly take home based on $60,000 would be $918 (plus any working for families tax credit you might qualify for)

[dreamer12]

Thank you very much for the valuable information....this will surely help me making up my rough budget;

[dreamer12]

BTW; is contributing to kiwi saver mandatory? in that case what will the 60K annual salary (used as a reference) means in reality?

[GrumpyGoat]

We have been here 2 years and we do not currently contribute to Kiwisaver.

But not 100% sure of the rules or requirements.

I believe you have to opt in but I could be wrong.

[Sun777]

BTW; is contributing to kiwi saver mandatory? in that case what will the 60K annual salary (used as a reference) means in reality?

It's not mandatory. You get tax benefits for enrolling though. I think the available options are 2%, 4% and 8% of your salary that you can choose (while your employer contributes standard 2%). If you don't opt for kiwisaver, the amount will be taxed according to your tax bracket.


Check with your employer if you can opt for Super Annuation.

[Wooly_Cow]

You get tax benefits for enrolling though.

.

Not sure what these are. Kiwi saver is deducted AFTER income tax, though the final payouts are then also tax free. You get a small starter bonus paid by the government and you can access the saved ammount when you buy your first house (which to me sort of suggests the Kiwi Government still think that housing is an investment vehicle)

....however if I've missed anything in the way of tax benefits please let me know because I have capped my contirbutions to the minimum required to get full employer contributions