Work in New Zealand and Tax System
Work in New Zealand and Tax System
Work in New Zealand and Tax System

Job market overview

The overall employment is forecast to grow by 2.1 per cent (or 52,500) in 2018, by 2.3 per cent (or 56,900) in 2019 and by 1.7 per cent (or 43,600) in 2020 — 153,000 more people employed over the next three years. These employment gains also reflect an ongoing employment shift towards the services sector, a continued growth in construction activity across the country and average net migration levels above long-term over the next 3 years.

The strength of employment growth varies across different sectors and regions. Business services (up 33,300) will make the largest contribution to overall employment growth, followed by construction and utilities (up 19,400) and health care and social assistance (up 15,500) sectors.

At the regional level, employment growth will be fastest in the Auckland and Waikato regions in the North Island, and rural regions in the South Island.

Employment growth is forecast to be broad-based over the next three years. The largest increases will be in business services, construction and utilities, and health care & social assistance sectors. These sectors will grow at a faster pace than the national average year-on-year growth.

Work in New Zealand and Tax System

Employment is forecast to grow at a faster rate in Marlborough, Tasman, and West Coast regions, with all three regions summing up 6,600 more workers to the projected employment growth by 2020. In the North Island, Auckland and Waikato regions are expected to have the highest growth rates, with both regions creating about 83,300 employment opportunities by 2020. Overall, five out of the 16 regions (2 in the North Island and 3 in the South Island) are forecast to grow faster than the national rate over the forecast period.

Work in New Zealand and Tax System

Unemployment rate falls to 4 per cent as employment growth exceeds labour supply growth.The effects of strong working age population and employment growth will be evident in the labour market. Strong labour force participation and net migration levels above long term average will sustain continued strength in labour supply, but with growth diminishing over time. Employment growth exceeding labour supply growth will result in unemployment rate trending down to 4 per cent in the short-term.

Work in New Zealand and Tax System

In the year ended in the June 2018 quarter:

• Median weekly income from wages and salaries increased $38 (4.0 percent), to $997.

• Median hourly earnings from wages and salaries increased $0.71 (2.9 percent), to $25.00.

• Median weekly income from government transfers increased $5 (1.4 percent), to $341.

Work in New Zealand and Tax System

Jobs in skill shortage

Work in New Zealand and Tax System

Jobs can appear on an Immigration New Zealand skill shortage list. This means the Government is actively encouraging skilled workers from overseas to work in that role in New Zealand. If you are offered a job in New Zealand which appears on a skill shortage list and you have the qualifications and experience to match, getting a work and residence visa will be easier. This is because the Government has identified that employers need to recruit people from overseas to help meet demand for your skills. A full list of current skill shortages in New Zealand can be found by using our handy tool: http://skillshortages.immigration.govt.nz/.

Employee rights and obligations

Work in New Zealand and Tax System

Under New Zealand employment law, you and your employer both have certain rights and obligations. For example, your employer is obliged to pay you an agreed wage, and to make sure wherever you have to work is safe.

Your side of the bargain requires you to perform your job with care and competence, among other things. 

The legal manual produced by Community Law lists your basic rights and obligations.

One of your obligations as an employee is to stay within the conditions of your visa. If you have a work visa, it might be tied your employer, industry, or to a particular city or region. If that’s the case and you want to switch jobs, you’ll need to apply for a variation of conditions first.

Know your employment rights quick guide:https://www.employment.govt.nz/starting-employment/rights-and-responsibilities/minimum-rights-of-employees/.

Job sites to explore

Work in New Zealand and Tax System

Specialist sites

Sites designed to connect offshore workers with NZ employers:

Working In


New Kiwis

Other job sites

Lots of jobs, but employers will not always be open to hiring from overseas:


Working In

Working In

Source: MBIE, Stats NZ, NZ Immigration, Career NZ

Work in New Zealand and Tax System

Key features of New Zealand’s tax system include:

• no inheritance tax

• no general capital gains tax, although it can apply to some specific investments

• no local or state taxes, apart from property rates levied by local councils and authorities

• no payroll tax

• no social security tax

• no healthcare tax, apart from a very low levy for New Zealand’s Accident Compensation injury insurance scheme (ACC).

Who handles tax in New Zealand?

Work in New Zealand and Tax System

The Inland Revenue Department (IRD) is responsible for handling taxation issues for individuals, families, businesses, employers, not-for-profit groups, non-residents and visitors in New Zealand.

If you obtain employment in New Zealand, you will need to apply for an IRD number, which will serve as your unique tax identifier. This eight or nine-digit unique number will never change, even if you move to another country and then return to New Zealand at some stage in the future.

Will I need an IRD number?

Work in New Zealand and Tax System

You must obtain an IRD number if:

• You are earning an income

• You are starting a business

• You are registering for Working for Families tax credits

• You are registering for a student loan

• Your child has a part-time job

• You file tax returns

• You ask the Inland Revenue about your tax

• You apply for child support

If you do not have an IRD number, tax will be deducted at the ‘no notification’ rate, which is the highest rate of tax (currently 45 cents for every dollar earned or 47 cents if including the ACC earners’ levy). You can also apply for an IRD number for your child so a lower rate of withholding tax is deducted from interest earned on their bank balance.

How do I get my IRD number?

Work in New Zealand and Tax System

To get your IRD Number, you start by filling out an IR595 form.

Once you’ve done that, you need to prove your identity. To do this, take your completed IR595 to an AA Driving Licensing Agent or a Postshop.

You’ll need two supporting documents and a photocopy of each supporting document. Acceptable supporting documents are typically a passport (with New Zealand Immigration visa/permit if applicable) and a driving licence.

The Licensing Agents or Postshop will send your application to IRD and you should receive your IRD number within 8 – 10 working days.

Taxable Income

Work in New Zealand and Tax System

In New Zealand, the below types of income are all subject to income tax:

• salary and wages

• business and self-employed income

• most social security benefits

• income from investments

• rental income

• profit from selling capital assets in some circumstances (this does not usually apply to personal assets sold)

• income a New Zealand tax resident earns from overseas

Income Tax Rates In New Zealand

Work in New Zealand and Tax System

The standard New Zealand tax year runs from 1 April to 31 March. The IRD is explicit in terms of how much tax income earners will owe. For every $1 earned, you will pay: (Make sure you're using the right RWT rate ).

• 10.5 cents of every dollar for income up to $14,000

• 17.5 cents of every dollar for income from $14,001 and $48,000

• 30 cents of every dollar for income from $48,001 to $70,000

• 33 cents of every dollar for income of $70,001 and over

To work out how much tax you’ll pay based on your annual income in New Zealand, use the Inland Revenue‘s handy online PAYE calculator.

Companies and corporates are taxed at a flat rate of 28%.

• If you have children, you may qualify for assistance – see Family Assistance.

• If you live overseas and have a bank account in New Zealand, the tax rate on the interest is 10% or 15% depending on where you live.

• All employees are taxed under the Pay as you Earn (PAYE) system, which means that the correct amount of tax is deducted from your wage before you get it.

• To ensure you pay the correct tax during the year, your employer will give you a tax code. For your main source of employment or sole employment your tax code should be ‘M’ or ‘ME’. You can check that you are on the correct tax code by using this IRD tax code flowchart.

• Employees will also have a small levy called an ACC earners’ levy deducted from their wages. For 2016-17 the rate is 1.39% of earnings. Self-employed people may have to pay a higher ACC levy.

• New Zealanders currently pay 10.5% tax on the first $14,000 of income; this is the lowest rate for over twenty years.

Goods & services tax (GST)

Work in New Zealand and Tax System

Goods and services tax (GST) is a tax on most goods and services in New Zealand, most imported goods and certain imported services. GST is added to the price of taxable goods and services at a rate of 15%.

Taxable goods include all types of personal and real property and food, while services cover everything other than goods or money, for example TV repairs and doctors’ services.

GST exceptions include:

• rental of residential property

• Duty free items

• financial services such as mortgages, loans and investments, bank services (including interest)

• and the sale of a business that is capable of being carried on by the purchaser as a taxable activity (going concern)

Four years’ tax concession

Work in New Zealand and Tax System

Income from overseas investments or pensions can be exempt from New Zealand tax for your first four years of living here, if you are eligible for ‘transitional tax resident’ status.

During that period, only your New Zealand sourced income may be liable to income tax.

While there is no general capital gains tax on New Zealand investments, after the four years tax can apply to realised and non-realised gains on overseas portfolios, including exchange gains.

For more information visit Inland Revenue’s website. (Temporary tax exemption on foreign income | Inland Revenue)

Double Tax Agreements (DTAs)

Work in New Zealand and Tax System

New Zealand has a network of 40 Double Tax Agreements (DTAs) in force with its main trading and investment partners. You may be a tax resident in both New Zealand and another country. The purpose of a DTA is to ensure that you are not taxed twice (in two separate countries) on the same income. (Double tax agreements | Inland Revenue)


Work in New Zealand and Tax System

KiwiSaver is a voluntary savings initiative designed to make it easier for New Zealanders to save for their future and retirement. It deducts 2%, 5% or more from your earnings and saves it for you in a government trust fund.

KiwiSaver is open to all New Zealand citizens and people entitled to be in New Zealand indefinitely who are under the age of eligibility for New Zealand superannuation (currently 65).

Source: Inland Revenue Department