An IRD number is an eight or nine digit number which is unique to you. It’s very important as all your tax, entitlement and personal details are linked to this number and are stored securely with Inland Revenue.
You will require an IRD number if you:
- Earn income from any source, including a job or investments
- Receive a benefit or pension
- Join KiwiSaver
- Apply for a student loan or child support
- Start a company or go into business
- File tax returns
- Apply for Working for Families Tax Credits
- Buy, sell or transfer any New Zealand Property
The good news is that in most situations you will only need to apply for your IRD number once. This is because your IRD number stays with you for life. This is handy as it means that Inland Revenue have a record – which you can access, of all the New Zealand taxable income which you have earned throughout your employment. If you leave New Zealand temporarily you can still use your same IRD number on your return (you may need to contact Inland Revenue to make sure it is active).
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To apply for your IRD number you will need to complete one of the following forms:
IRD number application – resident individual (IR595) form – This form needs to be completed if you are a New Zealand citizen or residence class visa holder.
IRD number application – non-resident/offshore individual (IR742) form – This form needs to be completed if you are classed as an offshore person. An offshore person is someone who:
- is a New Zealand citizen and has been overseas for the last three or more years continuously, or
- doesn’t have a New Zealand residence class visa granted by Immigration New Zealand, or
- has a New Zealand residence class visa and has been overseas for the last twelve or more months continuously.
If this applies to you, you will also require:
- a fully functional New Zealand bank account, or
- Customer Due Diligence completed by a New Zealand reporting entity
Once you have completed your IRD number application form you will need to take the original document and legible copies of supporting documents to either:
- Automobile Association (AA) Driver Licensing Agents, or
Once you have received your IRD number you are ready to commence work in New Zealand!
You will need to provide all your employers with your IRD number to ensure that any tax they deduct from your income is attributed to you. Now that you are paying tax in New Zealand it’s also important to keep an eye out for the end of the financial year! At the end of each financial year you can submit your application for a tax refund assessment. This will ensure that any overpaid tax is refunded out to you!
If you have recently started employment it is also important to make sure that you are using the correct tax codes/rates. When you provide your employers with your IRD number make sure you have also advised them of the correct tax code to apply to your income. This will ensure that your income is taxed at the correct rate. You can also provide your bank with your IRD number so that they can send any interest details through to Inland Revenue directly. This also gives you the opportunity to make sure you’re using the correct RWT rate on any interest bearing accounts and the correct PIR rate on any Portfolio Investment Entities (such as Kiwisaver).
What happens if you don’t have an IRD number?
If you haven’t applied for your IRD number but you begin receiving New Zealand income your employer will deduct your income tax at the highest “non declaration” tax rate of 45%! This is far higher than a standard tax rate and will result in you losing close to half of your weekly/fortnightly or monthly income to tax! This is why it is very important that you apply for your IRD number as soon as you plan on starting employment.
Whilst you are working in New Zealand it is important that you know your tax obligations. In most situations your employer will deduct your tax for you either by way of the PAYE system or through Schedular payments. If you are receiving income without tax deducted you will need to declare this as part of your end of year tax return. You can check out Inland Revenue’s website for details on declaring untaxed income.
Obtaining IRD numbers for your children
If your children are born in New Zealand then you can apply for their IRD numbers as soon as they are born. All you need to do is complete an IRD number application – resident individual (IR595) form on their behalf and submit it as you would your own. Alternatively you can also apply for your child’s IRD number when you register their birth with The Department of Internal Affairs. Once your children have received their IRD numbers they will be recorded with Inland Revenue and will retain these numbers for when they begin their own employment.
If you have been registered for an IRD number at birth it is likely your parents will hold a record of your IRD number. Otherwise you can contact Inland Revenue and they can provide you with your IRD number. As your IRD number is unique to you all you will need to do is answer a few security questions to prove you are who you say you are, easy!
Are you receiving Working for Families Tax Credits?
If you are receiving Working for Families Tax Credits then you will need to obtain IRD numbers for any children you have in your care. This is needed for when Inland Revenue complete your Working for Families assessment, children having their own IRD numbers means that Inland Revenue can keep track of who is receiving payments for who!
If you have been receiving Working for Families Tax Credits but have not registered your children with IRD numbers, things get a bit tricky when Inland Revenue completes your assessment. Unfortunately as Inland Revenue has no way of identifying children who don’t have an IRD number they will not be able to include them in your Working for Families assessment. This means you won’t be eligible to receive any Tax Credits for children without an IRD number. If you have been receiving your payments throughout the year this could result in a bill!
If you aren’t sure whether your children have been registered for an IRD number then just get in contact with Inland Revenue and they will let you know.
If you can’t find your IRD number it’s a good idea to check the following places:
- Your payslip
- Log into your myIR Secure Online Services account
- Check any letters or statements from Inland Revenue
- Your KiwiSaver statement
And if all else fails you can get in touch with your tax agent or Inland Revenue.