New Zealand Tax

Income Tax

If you are staying in New Zealand for more than six months, and will be receiving any sort of income, you will be classified as a New Zealand resident for tax purposes, and may be required to pay income tax.  New Zealanders use the Pay as you Earn (PAYE) system, which means that your tax contribution is figured out by your employer and deducted from your take home pay.

You will need to provide your employer with an IRD number, a unique code that the Inland Revenue Department (IRD) uses to identify you and to work out your tax rate.  If you do not provide your employee with an IRD number, you will be taxed at the highest rate.  You can apply for an IRD number through the New Zealand Inland Revenue Department website, which means that you can claim an IRD number before you even enter the country.

Note: income earned on bank accounts is considered income, unless you give the bank your IRD number.

Employees are taxed when they earn income for more than six months.  At the end of the financial year, they must submit a tax return. This can be done via the IRD website (which provides an easy to use form) or through a chartered accountant.  Even if you are no longer in New Zealand, you will still need to submit a tax return.
Once the IRD has received your forms, they will determine if you have paid too much or too little tax throughout the year.

If you have paid too much, you will be entitled to a refund.  Occasionally, an employee will be issued with a bill for taxes owed to the IRD.  If you are required to pay money back, you must do so before you leave the country.  The IRD can arrange a payment plan for large tax bills.

Penalties for not paying the correct tax can be severe.  If you are unsure about any tax related issues, a chartered accountant or a representative from the Inland Revenue Department can help you out.