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income tax
PAYE
If you earn income from salary, wages or a social security
benefit, your tax will be deducted under the pay-as-you-earn
(PAYE) system. This means that the pay you get from your employer
has already had tax deducted.
ACC Levies
Inland Revenue is the agent for collection of the
employee’s Earner Levy as part of your PAYE deductions.
These levies provide insurance cover when people suffer an
accident outside of their work.
Provisional Tax
 People who operate a business as a sole trader, limited
liability company or other business entity have to account for
their own tax progressively during the year. This is referred to
as provisional tax.
Provisional tax is payable in three installments during the
year, based on what you expect your tax bill to be. The amount of
Provisional Tax you pay is then deducted from your tax bill at
the end of they year.
Goods and Services Tax (GST)
GST is charged on almost all goods and services in New
Zealand. It is a consumer tax. The GST rate is 15% of the price
of goods or services. For more information refer to our Business
section.
Resident Withholding Tax (RWT)
You pay Resident Withholding Tax on interest you earn from
bank accounts or other investments. The bank or investing
organization deducts this when they credit interest to your
account.
You need to provide your IRD number and choose the correct
rate of tax for your income level. Companies may also deduct
withholding tax from dividends paid to shareholders.
Family Assistance
 Family Assistance is financial help for low-to middle-income
families with children who are 18 years or or younger who are
living at home and are not financially independent. It is not a
benefit but recognition that not everyone can comfortably afford
al the costs of bringing up a family.
To be able to receive Family Assistance you must either:
- Be a New Zealand resident and
have been in New Zealand continuously for at least 12
months at any time. You need to be a tax resident and be
resident in New Zealand when you apply for your payments.
- Be caring for a child who is
both resident and living in New Zealand.
If you and your children are in
New Zealand unlawfully or hold only a temporary permit or visa,
then for Family Assistance purposes, you are not considered a New
Zealand resident.
If you recently arrived in New Zealand and meet the residence
conditions, you will need to attach a copy of your residence
permit to your application for Family Assistance.
How much you can get depends on:
- How many children 18 years or
younger you have living with you
- How much you and your partner
earn (your total family income)
- Where you get your income
from.
Inland Revenue pays Family
Assistant to families whose main income is from working. It can
be paid either fortnightly or as a lump sum after the end of the
tax year (31 March).
If your only income is from an income-tested benefit, then
Work and Income pay any entitlement to you as part of your
benefit.
Salary and Wage Earners
 Over the last few years, Inland Revenue has been simplifying
income tax for salary and wage earners so it is now more
accurate, less time-consuming and simpler for everyone involved.
IRD wants to ensure taxpayers pay the correct tax during the
year so there is no need for additional payments at the end of
the tax year.
A Personal Tax Summary (PTS) is available for salary and wage
earners if you need to pay additional tax at the end of the year,
or believe you are entitled to a tax refund.
The Personal Tax Summary uses information provided to us by
your employer(s) to reprint a PTS with your income and deduction
details for the year. If you receive a PTS you must check it for
any missing or incorrect details.
Personal Tax Summaries are issued form June onwards and
anyone can request one.
IR3 Tax Returns
You would be sent an IR3 if you:
- Are self employed
- Had income from a business or
rental property
- Received income that is not
taxed at source
- Received overseas income.
Child Support
 Child Support is money paid to support children when couples
with children are not living together or have separated. The
money is paid by the parent who is not living with the children
to the person whom the children live with.
Inland Revenue works out the amount of child support the
paying parent must pay. The amount is worked out each year using
a formula, which takes into account the number of children to be
supported and they paying parent’s income and living
expenses. Inland Revenue usually administers Child Support
payments.
Contact Inland Revenue
Complete listings of Inland Revenue’s NZ Freephone
numbers and office locations are included in the Blue Pages of
The Telephone Book. If you have an IRD number please have it
ready when you call.
Student Loans
The Student Loan Scheme is available to students studying at
tertiary level (after secondary school). This helps towards the
cost of studies and books.
The three organizations involved in the Student Loan Scheme
are:
- The Ministry of Education,
which advises the government about student loan policies.
- Work and Income (a service of
the Ministry of Social Development), which processes loan
accounts in the year the money is borrowed.
- Inland Revenue, which
collects student loan repayments from the year after the
money is borrowed.
To get a student loan you need to
be studying at a tertiary institution, and be in a programme
approved by the Minister of Education. You must also be 18 years
or older (if you are under 18 years, you need a parent’s
consent). You need to be a New Zealand citizen, a permanent
resident, or a refugee entitled to live in New Zealand
indefinitely.
The amount you get depends on:
- The type of tertiary
institution you are studying at
- How much your fees are
- Whether you are studying full
or part-time
- The duration of your study
programme
- Whether you receive a student
allowance (for living costs)
- Whether you or your partner
get a benefit
 A student loan has four parts -
compulsory fees; course-related costs; living costs; and a $50
administration fee.
A student loan is a debt and you must pay back any money you
borrow, including interest, which is currently 7%. If you decide
to take out a student loan, it is wise to borrow only the amount
you need for your studies.
You must start repaying your loan at the rate of 10 cents per
dollar earned over $15,496. If you think you will earn more than
this from your main job between 1 April and 31 March, you must
tell your employer you have a student loan use the M SL tax code.
You can save money by making voluntary payments at any time
and for any amount. You can do this even if you are earning under
the repayment threshold, or you can simply make additional
repayments above the amount you are required to pay. By paying
your loan off faster you can save yourself a lot of money in
interest.
Paying Tax
Inland Revenue is the government department that collects
taxes - it is popularly referred to as the IRD.
The New Zealand tax year is from 01 April to 31 March and
most people pay their taxes as they earn their income. Employers
deduct tax on salary and wages. Banks and other financial
institutions deduct tax on interest as it is derived.
People who do not pay tax on all of their income as it is
earned are required to file tax returns at the end of the tax
year (31 March) to work out their tax liability. In most cases,
Inland Revenue will send you all the material you need to file
tax returns and make payment.
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