New Zealand’s tax system is easy to use compared with many other countries.
The New Zealand Government relies on taxes to help fund services that benefit all New Zealanders. All taxes are paid to Inland Revenue — the Government’s tax department, which is also known as IRD.
This page helps you learn about our tax system and how it works. It is just a summary — we suggest you seek professional advice if you need more information or help with paying tax.
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Your employer will take PAYE tax from your salary or wages before they pay you and pay it to Inland Revenue on your behalf.
Inland Revenue works out how much personal tax you have to pay automatically. But some people have to file an individual tax return (IR3) to declare their income.
An IR3 is a statement of how much income you have earned over the tax year (1 April to 31 March). It includes money earned from a range of sources, like salary and wages, overseas income, superannuation, investments and rental income.
Filing a tax return
Most new arrivals will need to file a tax return in their first year here.
Non-residents, like people on work visas, may need to file a tax return at the end of the tax year or when they leave New Zealand.
There are other situations when you must file a tax return.
Inland Revenue’s website has information about migrants’ tax obligations and a handy ‘Top 10 facts’ guide you should check.
If you are considering living in NZ, you may be eligible for the tax concession on overseas income for your first 4 years of living here.
New Zealand’s tax system is fair and has few loopholes (ways to avoid paying tax). Our tax environment is also good for your earnings and assets. In 2019, the US based Tax Foundation ranked New Zealand’s overall tax system as second in the developed world for competitiveness and fourth for individual (personal) taxes.
Working for Families credits for low and middle income earners.
Social security & insurance levies etc
Social security and health: Covered by general tax, though many people have private health insurance.
ACC (New Zealand’s unique accident compensation scheme): Earners pay 1.39% up to a maximum of $126,286 in earnings (2018/19 tax year). Motorists pay a levy with their annual car registration. Employers pay insurance cover based on industry risk.
Generally not on New Zealand investments, but applies to foreign debt and equity investments.
Imputation system to avoid double tax.
Not since 2011.
Tax on savings
Little tax relief on contributions to New Zealand retirement schemes, but saving is not compulsory. Tax paid at normal income levels at source, but distributions are tax free. No mortgage interest tax benefits, except for investment property.
Fringe benefit tax (FBT)
Paid by employer, up to a rate of 49.25% for employer provided cars, low interest loans, medical insurance premiums, foreign superannuation contributions etc. FBT is tax deductible so employer cost is effectively the same as paying cash remuneration.
Sales & excise tax
Goods and services tax (GST) of 15% on most things.
Excise tax paid on petrol, tobacco, alcohol.
Tax is a complex area and this information is only a summary. You can find more information on the Inland Revenue website.