With your IR 330 form, you get an organizational chart that you can use to determine your personal tax code. Be sure to refer to this flowchart or use the « Tax Code Finder » on the IRD website if you think you have an unusual case for taxation in New Zealand. Right now, we`re going to review the tax laws that apply most to people on working holidays in New Zealand. The most common tax legislation among working holidays is M. This means that the job for which Form IR 330 is intended is your main/highest source of income, and: You use the tax number « M » if you meet a combination of the following criteria: You have a tax number for your main income. The code you use depends on the type and amount of your main income. M SLUse M SL if your tax number is M and you have a student loan. Example: Lily has a job in an appointment calendar around the corner. She works 40 hours a week with a total annual income of about $40,000. Lily has no partner and receives no government support, so she uses ME tax legislation. IR calculates the correct tax amount for you and provides you with a special tax certificate. You must inform your employer or pension fund.

Use New South Wales tax laws if you are a recognised seasonal worker or if you hold a work visa as a foreign crew member of a vessel fishing in New Zealand waters. If you do not fill out this form with the right IRD number and the right tax identification number, you may be taxed much more than necessary. No one needs to cut their travel money! It`s in your best interest to get your code correctly, otherwise you`d end up paying too much or too little tax. If it`s the latter, you`ll get an unpleasant tax bill and you definitely don`t want it. If we determine that you are using the wrong tax identification number, we will ask your employer or payer to change it and notify you. We do this to prevent you from being taxed more than you should during the tax year or to avoid receiving an invoice at the end of the tax year. Talk to us if you disagree with our decision to change your tax legislation. In any job that works for a salary/salary, your employer will give you an IR 330 form to fill in your name, IRD number and tax number and tick the appropriate selection for your eligibility to work in New Zealand, usually to indicate that you have a valid work visa before signing and dating. Use a self-service tax code if the annual income from ALL jobs is less than NZ$14,000, but WITHOUT student loans. The ME and M tax codes have fundamental differences and if you are not sure about the two different codes, it is important that you seek professional advice to avoid a future tax bill.

You can use an ME tax code if: Tax codes are labeled codes that you need to put on the Tax Department`s Tax Return Form (IRD) (IR 330) that your employer should give you when you start a new job. STCSTC for a special tax law. This is a tax rate that suits your personal situation. It generally applies when the use of other tax laws results in an excessive or insufficient deduction of tax. You must apply for and obtain approval from IRD before you can use it. If one of your employees has more than one job, their tax code can also get a bit complex with secondary tax legislation. The IRD number is your individual tax number, which you can find out more about here. Your tax identification number could be, for example, M, CAE, NSW, SB. We will go through all this in this article. Example: Brad`s main income comes from his father`s coffee shop work.

He earns $38,000 a year. He also has a second job as a kitchen assistant and earns $8,000 a year. For the second job ($8,000), he should use S as the tax code. If he has a student loan, he would use S SL. The good news is that it is a common misconception that people pay a higher tax rate when they get a secondary tax law. New Zealand`s tax and PAY system is designed to tax employees at the correct rate. We have a progressive tax system that ensures that individuals pay a higher tax rate if they earn more. Our current tax rates for individuals are as follows: All new employees who take up employment must complete a tax return form (IR330). The employee is responsible for choosing a tax code and there is an organizational chart that the IRD has created to determine the tax identification number on which an employee must appear. If a person`s annual income from all sources is likely to be less than $14,000, the secondary tax number (for their second job) is SB. If the income is likely to be between $14,000 and $48,000, the tax number is S. If the income is to be between $48,000 and $70,000, an HS tax code will be used and if the income from all sources is greater than $70,000, a ST income tax code will be used.

Income from a self-service tax code is taxed at 10.5%, for an S code the tax rate is 17.5%, for an HS code the tax is 30% and for an ST code 33%. Talking about taxes is never a compelling topic, but one piece of information that is definitely worth knowing is how to use the right tax code for paid work in New Zealand. In reality, the system works and calculates the tax correctly in about 90% of cases. The 10% of the time the secondary tax system does not work is when a person`s income exceeds one of the income thresholds ($14,000, $48,000 or $70,000) because of income from their second job. An example of this is when someone`s first job earns him $40,000 a year, for which he would have a tax number M.. .