When Ben Franklin said “In this world nothing can be said to be certain except death and taxes” he wasn’t kidding.
Everyone in New Zealand pays their share of tax because this is how the government is able to fund free public services such as education, healthcare, roads and welfare. As proud Kiwis, we contribute to these necessary services, because we want to… and because we have to by law. That’s the toss up: if you want to be a resident of New Zealand, literally one of the best countries in the world, most of the income you receive both here and overseas is subject to being taxed.
In New Zealand, these are the most common types of personal income that are subjected to personal income tax:
- salary and wages
- business and self-employment income
- most benefits
- income from investments
- rental income
- profit from selling capital assets
- income that a New Zealand resident earns from overseas
The IRD collects personal income tax via the tax return system for the New Zealand government, who are then able to distribute the funds to benefit all citizens and residents. Here’s where most of the tax money goes:
Law and Order
Transport and Communications
Paying tax is what keeps New Zealand running, so when people don’t pay their fair share, say by getting paid under the table, every day, hard-working Kiwis miss out. When personal income tax is underpaid, it affects all of our important public services, from education to health care.
Filing your personal income tax return is very important and part of your duty as a New Zealand citizen or resident. Thankfully, this is often taken care of for us by our employers via the PAYE system. PAYE automatically deducts your tax from your earnings whether you’re paid weekly, fortnightly or monthly. PAYE includes both the tax rate for your income and an ACC earners’ levy.
If you do not have PAYE deducted you need to fill out a tax return at the end of each financial year. The process can be complicated, depending on whether or not you have a student loan, are eligible for tax credits, or work more than one job. Not to mention the issues that come with earning dividends and interest, getting rent from boarders or rental properties and more. This is where MyTax.co.nz comes in. We make your personal income tax process painless. Get in touch with us today!