What is the NZ tax system for workers?

If you are going to be receiving earnings through the working visa scheme during your time in New Zealand you will become part of the tax system. In most cases your only involvement will be applying for an Inland Revenue Department (IRD) tax number at the beginning which can now be done online. All the other machinations of paying tax are dealt with through the Pay as You Earn system (PAYE) which means the wages you receive will have had tax already deducted.

How much tax you will have to pay will depend on how much you earn with scales ranging from 10.5% of earning from those on minimum wage up to 33% for the highest income earners (unlikely to be you on a Working Holiday Visa). When you first start work (and for any subsequent jobs) your new employee will give you a form to complete which sets your tax code. This form has any easy flow chart system to guide you easily towards entering your correct tax code.

The rates in full are:

10.5% tax rate for gross earnings up to NZ$14,000

17.05% tax rate for gross earnings up to NZ$48,000

30% tax rate for gross earnings up to NZ$70,000

33% tax rate for all earnings above this

If you don't get an IRD number or fail to complete the form just detailed you will be put on emergency taxing which is 45% of your wages.

Included within these rates is an Accident Compensation Corporation (ACC) compulsory contribution that is intended to cover you for any industrial or work accidents. 

Taxes paid by workers on a Working Holiday Visa – or at least part of them - are often refundable although you do have to go through an active official process to get your money back.