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What is an IR330 And Why Do I Have To Complete One?

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Have you just landed your first job? Or perhaps you’ve changed jobs? There’s one form you really need to fill out to ensure you don’t get over taxed!

It’s called an IR330.

What is an IR330?

If you are an employee earning a salary or wage then you’ll need to fill out this form. Once you fill it out, sign the form and give it to your employer. This form specifies what tax code will apply so your employers know what tax rate to apply to your wages.

Sounds rather dull, huh. However, it’s important to get your tax code declaration right as getting it wrong could mean that you will be over-taxed!

Okay, so what next?

You’ll need basic details, such as your name and IRD number. You’ll also need to know your tax code. Unsure about your tax code? We’ll let you know how to work it out in the next section.

The rest of the form is pretty straightforward. If you’re not a New Zealand citizen, you first need to check if you’re entitled to work. You can do so by calling New Zealand Immigration on 0508 558 855, or 09 914 4100. Employers can face penalties if they employ someone who is not entitled to work in New Zealand, as can workers.

How do I know my Tax Code?

Use this form on the Inland Revenue website to work out your tax code. The most common tax code in New Zealand is M.

You use an M tax code if you meet a combination of the following criteria:

  • You receive an income tested benefit
  • This job is your main or highest source of income
  • You are a New Zealand tax resident
  • Your annual income is unlikely to be between $24,000 and $48,000
  • You or your partner receive Working for Families Tax Credits or an overseas equivalent or you receive NZ Super, veteran’s pension or an overseas equivalent
  • You don’t have a student loan

Example: Zoe has a part-time job at a fish and chip shop. She works three hours a day and earns $15,000. This is Zoe’s only job, so she uses the M tax code.

Variations include M SL, ME and ME SL. SL stands for “Student Loan”.

Your tax code may change from time to time, so if you’ve been employed previously, it pays to check if you need a new one. The conditions that may cause your tax code to change include having more than one job, receiving tax credits, having a student loan, having paid off your student loan, or if you receive any contractor payments.

Tax credits include payments such as Working for Families Tax Credits (WfFTC). Contractor payments, sometimes referred to as schedular payments, include any non-wage work you do in return for payment.

While most people fall into the main tax codes, such as M, ME or WT, there are a few specific exceptions. Are you a casual agricultural worker on a day-to-day basis? For example, you might be a shearer or shed hand. If so, Inland Revenue does not see you as a contractor, so will use a different code – likely CAE. Seasonal workers (NSW), such as fruit pickers, and election workers (EDW) have their own specialised codes, too.

If you’re still unsure after filling out the form, contact Inland Revenue. Again, it’s important to get it right because getting it wrong could result in you paying too much or too little tax. Paying too little tax is just as much a problem – possibly more so – as it may involve penalty payments and immediate demands to make up the difference.

What happens if I don’t fill out an IR330?

If you don’t complete an IR330, your employer will use the no-notification tax rate. The no-notification rate is a painful 46.39 cents in the dollar! For most people, that is a much higher tax rate than they’d pay if they’d filled out the form.

Also, it’s your responsibility to ensure you have the right tax code. Your employer then needs to lodge this with Inland Revenue when they pay you. Even if you supply the right tax code, but your employer uses the wrong tax code without you knowing, you’ll still be liable to pay the amounts that should have been deducted. So it pays to double-check it!

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