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Thread: Tax on income $70k

  1. #1
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    Default Tax on income $70k

    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.

  2. #2
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    NZ has a simple formula..
    Below $70K = 30%
    Above $70K = 33%

  3. #3
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    Quote Originally Posted by Shrub Tub View Post
    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

  4. #4
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    Quote Originally Posted by Shrub Tub View Post
    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.

  5. #5
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    Default Thanks

    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.

  6. #6
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    Quote Originally Posted by 72andsunny View Post
    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?

  7. #7
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    Quote Originally Posted by Bozeman View Post
    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

  8. #8
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    Quote Originally Posted by 72andsunny View Post
    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!

  9. #9
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    Its good to know that....

  10. #10
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    Quote Originally Posted by 72andsunny View Post
    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.

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