The Inland Revenue Department (IRD) is the government department that collects taxes in New Zealand.
You’ll have to pay taxes and are considered a tax resident in New Zealand if you plan to be here for more than 183 days within a 12-month period, or you have an ongoing relationship with New Zealand.
New Zealand has negotiated double tax agreements with many other countries to prevent you from being taxed twice. Visit the IRD website to learn more about our double tax agreements and which countries participate. Plus, you may qualify for a tax exemption on some of your foreign income.
Taxes on your New Zealand income are deducted each pay period and this system is called PAYE, or pay-as-you-earn. In New Zealand the tax rate is a graduated scale – rather than a flat rate – and starts at 10.5% for income earned up to $14,000 and caps at 33% on income greater than $70,000.
The tiered nature of our tax system results in a greater amount of take-home income than what you may expect.
For example, someone making $100,000 would be taxed 10.5% on the first $14,000, 17.5% through to $48,000, 30% through to $70,000 and 33% on the remaining $30,000 of the full $100,000. Ultimately their take-home pay would be $76,080.
Your income after taxes will be higher with the tiered system than being taxed a flat rate like many other countries.
Businesses are taxed 30% -- and if interested in learning more about company tax, click here.
New Zealand has a goods and services tax (GST) of 15% that is usually included in the price of goods and services and is not charged separately at the cash register. This is on all goods and services other than financial services.
You’ll only be charged a Property Tax if you’re in the business of developing properties. As a homeowner you will be charged yearly rates – these are assessed by your local council and depend on your area of residence.
Another element of New Zealand taxation that’s of great benefit to its residents: there’s no capital gains tax. There’s also no Estate Duty (similar to Inheritance Tax in the UK).
Check out more information about New Zealand’s tax system and learn about tax and tax exemptions on foreign income on the IRD website.
And to learn more about our superannuation plans and if your pension is transferable, look into our Retirement Savings information.
This answer was last updated on 11 July, 2012.
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