New Zealand Tax Laws and Regulations
New Zealand Tax Laws
With over 20 years’ experience, Bradford Jacobs is a leading international payroll provider. Our expertise in payroll and tax supports our work and helps us manage complex regulations facing companies wishing to expand into New Zealand.
New Zealand is established as one of the world’s top places to start a business due to its economic stability and its potential for growth. The country boasts a great work-life balance, lenient tax rates, low workforce costs, and a supportive startup community.
Dealing with tax matters is a major issue for companies seeking to develop an international presence, particularly as disciplinary measures can apply for non-compliance.
Tax, and especially overseas tax, can be complicated. The table below provides an overview, and this guide will explain the tax rates and administration concerning New Zealand Tax.
Overview of Taxes in New Zealand
| Tax Type | Percentage |
|---|---|
| Individual Income Tax | Progressive: 10.5-39% |
| GST (Goods & Services Tax) | 15% |
| Corporate Income Tax | 28% |
| Employer Social Security Contributions | 3-10% (Employee) 3% (Employer) |
New Zealand Individual Tax – Single, Married
In New Zealand, an individual’s liability to pay income tax is determined by their residency, as well as the source of their income. Residents are taxed on their worldwide income, whilst non-residents are subject to tax only on income from sources in New Zealand.
Income derived from employment activity performed in New Zealand is considered as domestic-source income, even if it is paid from abroad – in these cases, income tax is still due.
Taxable income includes:
- Income from salaries, wages, or self-employed work
- Benefits and student allowances
- Assets and investments such as KiwiSaver and rental income
- Overseas income
New Zealand’s tax system is based on self-assessment – individuals’ income tax is normally withheld by employers and paid directly to the Inland Revenue Department (IRD) monthly on the employees’ behalf.
However, individual tax returns are still required, and the following tax forms are sent to the individual to confirm or modify the tax assessments for the previous year – a tax assessment form, a request to confirm or provide new information about your income, as well as a message to complete an individual tax return (which can be received by post or online via myIR).
Personal income tax is paid at a progressive rate, depending on the amount of income being earned:
| Income (NZD) | Tax Rate (%) |
|---|---|
| 0 – 14,000 | 10.5 |
| 14,001 – 48,000 | 17.5 |
| 48,001 – 70,000 | 30 |
| 70,001 – 180,000 | 33 |
| 180,000 + | 39 |
Besides income tax, individuals also have the option to contribute to a private fund known as KiwiSaver, which must also be withheld by the employer and paid directly to the authorities monthly.
Tax Returns are due by 7th July each year, depending on the income type and/or country of the source.
In the case of married couples, both individuals are to be taxed separately.