For all workers in New Zealand, whether employed or self employed, it is essential to have an IRD number. This is a unique number which is yours for life once it has been issued, even if you leave the country for a time. Some numbers have 8 digits and some have 9. Those who do not have this number will still have tax deducted but at a higher rate than is necessary. This number should be given to your employer, your bank (for tax deductions on interest payments) and your accountant if you have one. In order to apply for the IRD number you need to complete the form available from the website of the Inland Revenue. The form details the different types of ID which can be used in support of the application but these include a passport, birth certificate, driver’s licence and visa documentation. The application for an IRD number takes around 10 working days. All applications need to be verified at an approved location (these include post offices and AA agents) and sent on to the Inland Revenue.

Most people will pay income tax on the PAYE system, with the monies deducted directly from their salary. Your employer will need to have your IRD number in order to deduct the correct amount. Workers are able to use the Inland Revenue’s online checker to ensure that they are on the correct tax code.

The current income tax rates for individual workers range from 10.5% to 45%. Workers who earn $14,000 and less pay the lowest rate. Those who earn between $14,001 and $48,000 per year will pay 17.5%. Workers earning between $48,001 and $70,000 per year will pay 30%. Those who earn more than $70,001 each year will pay 33%. The highest rate of 45% is reserved for those who fall into the ‘no notification’ category, having not completed a tax code declaration or obtained an IRD number.

Those who are self employed will need to complete an annual tax return. These are issued each year by the tax department and sent to individuals by the 31st May. Individuals are also able to file a return online or request a paper form to complete if one has not been issued. Forms need to be returned to the Inland Revenue by the 7th July each year. Acknowledgements are sent out when the form is received and these will be followed by the relevant tax bill. The tax year in New Zealand runs from the 1st April to the 31st March.

You may also be required to file an income tax return if you have had a second job or gained any monies from an inheritance, royalties, been declared bankrupt or if you moved to New Zealand part way through the tax year. If you are unsure if you will need to complete an income tax return then you can consult your accountant or the Inland Revenue directly. In order to pay your income tax bill there are a number of options available to you. Electronic payments are the most popular and you can simply use a credit or debit card, a direct debit payment or make use of internet banking to transfer the monies. It is also possible to send a cheque via the post or make payments over the counter at branches of the Westpac Bank. The statement you receive with your income tax invoice will tell you when the payment should be made.

For those who fall into the category of non-residents, there are double taxation agreements in place with a number of countries. This prevents the worker being charged tax in two different countries on the same income. The double taxation agreements are reviewed regularly and in recent years some have been terminated. Expats from the UK and the US as well as Australia, a number of European countries and Asian countries are able to claim a ‘credit’ for tax that has already been paid.

Useful Resources

Inland Revenue
PO Box 39010
Wellington Mail Centre
Lower Hutt 5045
Tel: 0800 227 774 (from New Zealand)
Tel: +64 4 978 0779
Email: Online form on website
www.ird.govt.nz

Non-resident Contractors Team
Inland Revenue
PO Box 2198
Wellington 6140
New Zealand
Phone: 64 4 890 3056
Fax: 64 4 890 4510
Email: nr.contractors@ird.govt.nz
www.ird.govt.nz