Nelson Tasman Settlement Support

A Partnership between Department of Labour and Nelson City Council

Government programmes

Work and Income New Zealand

Work and Income is the government department that administers income assistance, including benefits for people who are unemployed, sick or have a disability. It also administers Working for Families assistance (along with Inland Revenue) for working people on low or middle incomes. Work and Income also helps people find jobs. If you have permanent residency or a valid work permit, you may register.

Tel: 0800 559 009 (English). Work and Income has separate numbers for other languages – ask for these. 22 Bridge Street Nelson, 275 – 279 Queen Street, Richmond. www.workandincome.govt.nz

Inland Revenue (IRD)

The Inland Revenue Department, known commonly as IRD, collects most of the revenue that government needs to fund its programmes. It also administers a number of social support programmes.

If your income is from salary, wages, benefits or taxable pensions, your tax will automatically be deducted under the PAYE (pay as you earn) system. This means when you get your weekly, fortnightly, or monthly pay, your tax has already been deducted from it. Go to the IRD’s website and work out how much tax you’ll pay.

PAYE is the tax your employer deducts from your salary and wages. It includes:

  • the tax rate for your income, and
  • an ACC earners' levy (the personal service rehabilitation programme, compensating injured workers)

The following link provides more comprehensive information on income tax: http://www.ird.govt.nz/income-tax-individual/

What you need to do

Follow these steps to pay tax on your salary or wage income:

  • Give your IRD number to your employer or payer.
  • Complete a Tax code declaration (IR330) form, sign it and give it to your employer.

For information moving to New Zealand and the specific topics below, visit this page http://www.ird.govt.nz/yoursituation-nonres/move-nz/:

  • income tax
  • KiwiSaver
  • Student loan
  • working for Families tax credits
  • temporary tax exemption on foreign income

Current income tax rates for individuals

 

Taxable income

PAYE rate for every
$1 of taxable income
(excluding ACC earners' levy)

PAYE rate for every
$1 of taxable income
(including ACC earners' levy*)

up to $14,000

12.5 cents

14.2 cents

$14,001 to $48,000 inclusive

21 cents

22.7 cents

$48,001 to $70,000

33 cents

34.7 cents

$70,000 and over

38 cents

39.7 cents

No notification**

45 cents

46.7 cents

Use the Tax on annual income calculator if you want to know the tax rates for previous years.

* The earners' levy rate for the tax year 1 April 2009 to 31 March 2010 is 1.7% ($1.70 per $100)

** Employers are legally required to use the no notification rate when an employee does not fully complete the Tax code declaration (IR330). A completed form must include name, IRD number and tax code. The form must also be signed.

Example 1
John's total taxable income for the year was $65,238. Here is how to work out the amount of tax due on the income:


$0 to $14,000

@

12.5%

=

$1,750.00

$14,001 to $48,000

@

21%

=

$7,140.00

$48,001 to $65,238

@

33%

=

$5,688.54

 

$14,578.54

Therefore the tax due on John's income of $65,238 was $14,578.54.
Example 2
Sarah's total taxable income for the year was $45,000. Here is how to work out the amount of tax due on the income:


$0 to $14,000

@

12.5%

=

$1,750.00

$14,001 to $45,000

@

21%

=

$6,510.00

 

$8,260.00

Therefore the tax due on Sarah's income of $45,000 was $8,260.00.