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26th January 2015, 06:31 PM
#1
Taxation queries
Hello,
Can anyone shed light on the taxation system in NZ?
For example, a family of 3 children with a sole income earner of say, $84,000 per annum ($7000/month) - just to make calculation simpler.
From what I understand is that taxation rate is at 33% and with children, there would be some tax credits? How much would that sum up?
So, what will be the net income every month? Is the tax deducted monthly or yearly? Also, other than income tax, are there any other deductions from gross income?
Thanks in advance.
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26th January 2015, 08:13 PM
#2
http://www.whatstax.govt.nz/need-to-...ly-assistance/
Hello Debisalso,
From what I see here plus the information from IRD and ITA, you probably will be entitled for the Family Tax Credits as you said you're the sole income earner. The amount depends on your income, weekly working hours, number of dependent children. More information is provided by the IRD on their website http://www.ird.govt.nz/wff-tax-credi...html?id=finout. Also, there's a scheme to have an idea of how much you will get based on your children's number and ages.
The tax credits will usually be calculated before tax is deducted from your pay. That's mean it is subtracted directly from your tax, unlike tax deductions, which are commonly in the form of deductible expenses.
If you haven't received your tax credits in your payments, you can contact IRD and they will find out and calculate your eligible tax credits in your Personal Tax Summary and give you a lump sum amount. More information of the process here http://www.ird.govt.nz/income-tax-in.../end-year/pts/.
Hope it help.
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26th January 2015, 08:28 PM
#3
In regard of your question of deductions, there are other tax deductions from gross income, these are commonly known as expenditures. They may be deductible from your income for tax purpose as long as they are relevant and derived as a cause to or from your income, [check DA 1 - Income Tax Act for more information], and not falling into the limitations set out in DA 2, including Personal/private expenses, capital expenses [waging capital, assets/properties acquisitions fees, etc], withholding tax, employment limits, etc.
Say, like if you're a professional businessman and suits are important to you as they are mostly part of your day-by-day business, you can apply for a tax deduction of the expenses of those suits, given that they are proved to be part of your business course as essentials.
As I don't know what kind of work you're involved, either self-employed or wage earning, and your industry, I can only give you a general idea of the deductions you may get.
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27th January 2015, 06:29 PM
#4
Hi Alistar,
Thank you. The links are very useful.
Are tax deducted from salary on a monthly or yearly basis?
On what salary range would be comfortable for a family of 5 in a) Auckland, b) Wellington?
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26th January 2015, 09:05 PM
#5
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27th January 2015, 06:39 PM
#6
Tax is deducted for each pay by you employer, so, could be weekly, every other week, monthly, depends on your companies pay schedule...
For a family of 5 in Auckland, I would suggest a combined family income of no less than $100k to live comfortably (preferably more!)... You can live on less, but you make sacrifices.
Worth noting, many (most?) households in Auckland are dual income... It's certainly the norm.
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