New Zealand Income Tax Rates

New Zealand operates a comprehensive taxation regime under which New Zealand Tax Residents are subject to income tax on their worldwide income - in the simplest terms, any money you earn is taxed. New Zealand has a Double Tax Agreement with the UK, so you will not be taxed twice on any UK income. 

New Zealand operates a self-assessment system where taxpayers are responsible for completing and filing their own tax returns if required. Employees have tax deducted from their earnings as they are paid by their employers. The tax is paid to the Government under a system known as "pay as you earn" (PAYE).

Taxpayers who derive their income from sources such as businesses, rental or investments pay tax in three instalments during the year with a fourth annual square-up payment. This is referred to as the provisional tax regime.  

If you are earning a wage in NZ, you'll find that approximately the same amount of your income disappears automatically to the tax man as in the UK. The main difference is that there is no personal allowance; but on the up-side, there are no stamp duties, estate duties, or National Insurance contributions - but there is an ACC earners' levy in New Zealand on salary and wage income which covers the cost of non-work related injuries. This is levied at 1.7% (in the 2009-2010 tax year) of salary and wage income and is taken along with PAYE for employees.

The New Zealand tax year runs from the 1st of April to the 31st of March the following year. The UK tax year runs from the 6th of April to the 5th of April the following year.

The income levels at which income tax is assessed are:

Individuals (from 1st April 2009)

• up to NZ$14,000, the rate is 12.5%
• between NZ$14,001 and NZ$48,000, the rate is 21% 
• between NZ$48,001 and NZ$70,000 the rate is 33% 
• over NZ$70,000 the rate is 38%

Individuals (from 1st April 2009), including the ACC earners' levy:

• up to NZ$14,000, the rate is 14.2%
• between NZ$14,001 and NZ$48,000, the rate is 22.7% 
• between NZ$48,001 and NZ$70,000 the rate is 34.7% 
• over NZ$70,000 the rate is 39.7%, up to a maximum of $1,810.04

Companies:

• all income is subject to the flat rate of 30%

Complying Trusts:

• income retained by the Trust is subject to the flat rate of 33%
• income distributed to beneficiaries (with 6 months of balance date) is taxed at the rates for the individual beneficiaries (as listed above)

Don't hesitate to contact us if you have any questions about your tax position as a UK migrant to New Zealand or a Kiwi returning from the UK.