progressive tax.. IRD

[cricfor]

hi all..

is anyone here progressively taxed by your company?

say first month 10.5% and taxes keeps on increases as your salary summation increases accroding to the below table..

Tax rates for the 2017-2018 tax year

Taxable income Tax rate
Up to $14,000 10.5%
Over $14,000 and up to $48,000 17.5%
Over $48,000 and up to $70,000 30%
Remaining income over $70,000 33%

can someone tell me whether i should say INZ explicitly about the same while applying for SMC?

[ChrisMwn]

Anyone on a NZ employment contract is subject to PAYE (pay as you earn)

I'm not sure that the rates you quote are correct, but IRD tables are available at

https://www.ird.govt.nz/resources/2/...ir340-2017.pdf

[l00k]

No mate, it's not like you described. No company would do that way. Most NZ companies use payroll software like MYOB, Xero, Ace Payroll and they are designed to calculate the correct PAYE.
For example, if your annual salary is $52,000 and you receive your salary fortnightly, there should be 26 equal payments of $2,000.
Tax on $52,000 = 10.5% x 14,000 + 17.5% x (48,000 - 14,000) + 30% x (52,000 - 48,000) = $8,620
ACC (2017-2018) = 52,000 x 1.39% = $722.80
PAYE on $52,000 = $9,342.80
=> Net salary (yearly) = $52,000 - $9,342.80 = $42,657.20
=> Net salary (fortnightly) = $42,657.20 / 26 = $1,640.66

Even if you are paid wages, not a constant salary, it needs to be worked out to the correct PAYE as well. Not something like Jan 10.5%, Feb 10.5%, Mar 17.5% lol.
For example, week 1 you work 25 hours @ $25 per hour. Your gross wage = 25 x 25 = $625. At $625 a week (nominally $32,500 a year) your PAYE is $80.53 (12.88% average) thus you will take home $525.78.
In week 2 you work 35 hours @ $25 per hour. Your gross wage = $875. At $875 a week (nominally $45,500 a year), your PAYE is higher, at $128.03 (14.63% average) thus you will take home $746.97.

Please note:
- These calculations haven't taken into account KiwiSaver. However most recent immigrants on work visa are not eligible for KiwiSaver anyway.
- PAYE is NOT a FINAL tax. If you think you have been taxed higher during the year, you should file a tax return at the end of the financial year to get it back.
- The income year 2017-2018 is the last income year in which taxpayers are eligible for independent earner tax credit ($10 a week for income between $24k - $44k, and reducing for taxpayer earning between $44k - $48k)
- From next year a different tax bracket will be introduced to personal income tax.

[cricfor]

thanks a lot.