Income Tax Facts

 

Tax rates for individuals

  • 10.5% on income to $14,000
  • 17.5% on income between $14,001 and $48,000
  • 30% on income between $48,001 and $70,000
  • 33% on income over $70,000

 

Tax rates for Companies

  • The Company tax rate is 28%

 

Tax rates for Trusts

  • Trustee income is taxed at 33%
  • Beneficiary income (other than minor beneficiaries) is taxed at the beneficiary’s marginal tax rate.
  • Distributions to minor beneficiaries (under age 16 at the balance date of the trust) over $1,000 are taxed at the trustee tax rate of 33%.

 

Provisional Tax

Provisional tax is tax for the current year that is paid during the course of the year. Provisional tax may be payable by those who receive income that has not had tax withheld at its source. Provisional tax will usually be calculated on the basis of the taxpayers tax for the previous year. If a taxpayer had residual tax of $2,500 or more to pay for the previous year, they will have to pay provisional tax.

Provisional tax is usually paid in three instalments. For example, for the tax year ending 31 March 2013, provisional tax instalments will be payable on the 28th of August 2012, on the 15th of January 2013, and on the 7th of May 2013.

 

Terminal Tax

Terminal Tax is the balance of annual income tax. Terminal tax for a particular year is due on the 7th of February of the following year, unless the taxpayer has a tax agent, in which case terminal tax is due on the 7th of April of the following year.

 

PAYE (Pay as you earn)

Employers are required to make deductions from employees wages, and to pass these deductions on to Inland Revenue on behalf of their employees.
Income tax must be withheld from employees wages.

An employer may also have to withhold the following from an employee’s wages:

  • Child Support deductions
  • Student Loan deductions
  • KiwiSaver deductions

 

If an employee is a KiwiSaver member, the employer must make contributions to the employee’s KiwiSaver fund, and must withhold tax from those contributions.

 

(Go to our Information and Resources page for other tax facts and information)

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