NZ Income Tax

Sabi nila there are two certainties in life – death and taxes. Ewan ko kung totoo yon. Death definitely. Pero taxes, di naman lahat ng bansa may tax. Sa Saudi alam ko tax-free and kita mo. Ganun din sa Brunei. Sa Las Vegas din yata ganun din. But in most countries tulad ng NZ lahat ng income may tax.

Dahil di naman ako accountant and definitely not a tax expert, I’ll just give a summary of the income tax rates for individuals in NZ. If you need more information, I suggest you go to the website of the NZ Inland Revenue Department (BIR ng NZ).

Taxable Income	Tax Rate
Up to $38,000	19.5 %
$38,001 to $60,000	33 %
$60,0001 and over	39 %

For example if a person has an annual income of $65,238, his tax due is computed as follows:

$0 to $38,000 @ 19.5%	=	$7,410.00
$38,001 to $60,000 @ 33 %	=	$7,260.00
$60,0001 to $65,238 @ 39%	=	$2,042.82
Total Tax Due	=	$16,712.82

The NZ tax year starts on April 1 and ends on March 31^st of the following year. Everything you earn within this period is considered as your income. Some expenses can be deducted from your income and therefore won’t be taxed. These are called rebates. Examples of rebates are:

• Below $9880 rebate – if your income is under $9880
• Below $38k rebate – if your income is under $38000
• Child Rebate – if you are under 19 yrs old and attending school
• Donations – if you donated $5 or more to any charitable organization
• Childcare – if you have paid for childcare as a working parent
• Housekeeper – if you have paid for a housekeeper

For details and the maximum amount you can claim for each rebate, please consult the IRD website. Note that you must include receipts with your claims for donations, childcare and/or housekeeper.

Your total income minus all the rebates will give you your total taxable income. You then use this reduced figure to calculate your tax due.

If you work for a company, meaning you’re not self-employed or does not own a business, your salary is automatically deducted of tax. Your employer takes care of this. At the end of the year, you normally, don’t need to worry about filing any income tax return. However, if you want to claim any rebate and therefore claim a tax refund, you’ll need to fill up a separate form (IR526).You can download the form online, print it, fill it up and submit it to Inland Revenue at the end of the tax year.

Next time, I might write something about how you can avoid paying more taxes legally. Note: Legal po ito. Walang hocus-pocus at walang pandaraya. Pero pagiisipan ko muna at baka mali ang masabi ko at ma-audit pa ako ng IRD.