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Income distributions of individual customers 2001 to 2015

This section shows:

  • estimates of the number of individuals in bands of:
    • $1,000 taxable income up to $150,000, and
    • $5,000 bands for taxable income from $150,000 to $250,000, and
  • taxable income and income tax for people in each band.

The income and tax information is derived from IR3 tax returns, personal tax summaries and employer PAYE information. Taxable income for individuals is income that their personal income tax is assessed on for the March year.

For individuals:

  • with IR3 tax returns or personal tax summaries, this is income from all taxable sources less allowable deductions and losses
  • with negative income because of losses, they are recorded as having nil taxable income in the tables
  • who are non-filers, taxable income is calculated as their total PAYE gross earnings in the year ended 31 March. PAYE gross earnings can include income from employment and also taxable welfare benefits, NZ Super, earnings-related ACC, student allowances and paid parental leave.

The data for these statistics is available for download from the links below.

Income distributions of individual customers 2001 to 2015 | Excel | 211kb

Income distributions of individual customers 2001 to 2015 | CSV | 9kb

Graph of Taxable income distribution

image tax stats taxable income distribution 01 15 small

Large version of graph | Long description of graph

Graph of Aggregate taxable income declared by taxpayers in each income band

image tax stats taxable income declared 01 15 small

Large version of graph | Long description of graph

Spikes in the income distributions

The taxable income distributions portray a number of "spikes" of taxable income. Below $25,000 the spikes reflect taxable transfers such as welfare benefits or NZ Super, with large numbers of people having the same taxable income. Above $25,000 the spikes typically occur at income tax thresholds. This is likely to reflect taxpayer responses to the increasing marginal rates that they face.

Note  
  • The years refer to income years ended 31 March.  For example 2015 refers to taxable income earned in the period 1 April 2014 to 31 March 2015. Returns filed more than two years after the end of the income year are not included in the table.
  • The 2015 data is incomplete until after 31 March 2017 and will be updated next year.  Data for the current tables was extracted from Inland Revenue systems on 26 September 2016.
  • The individuals included in the table are those who:
    • filed an IR3 tax return for that income year, even if they filed a nil return or a loss.
    • received a personal tax summary (PTS) for that income year
    • paid PAYE through an employer including recipients of taxable welfare benefits, NZ Super, earnings-related ACC, student allowances and paid parental leave.
  • The data includes people with part-year incomes and can also potentially include children.
  • The individuals not included are those:
    • with no taxable income, unless they also filed a return or received a PTS
    • who did not file a tax return or receive a PTS because their only taxable income was from interest, dividends or PIEs and was fully taxed at source.
  • The data in the table is based on a random sample and has been scaled up to population estimates. The sample is 2% of wage and salary earners and 10% of IR3 filers. Income tax for Individuals is calculated based on their taxable income. The table shows income tax before any allowances for tax credits such as imputation credits or Working for Families Tax Credits. Tax credits included on the IR3 or PTS have been applied (ie, the low income rebate (to 2009), independent earner tax credit (from 2010) and tax rebates on the IR3 and personal tax summary are applied) but the calculation does not include the donations, housekeeper or redundancy tax credits. For non-filers, income tax is calculated as if they had filed an annual return.

[Terms and definitions]   [Feedback form]

Defined category Definition
Active customer
  1. A customer with any registered activity within a specific period, or
  2. a salary and wage earner whose only relationship with Inland Revenue is having PAYE deducted and paid on their behalf within a specific period.
Defined category Definition
Adjudication categories

Adjudication cases are classified (depending on the degree to which the position of the Commissioner of Inland Revenue was upheld) into the following five categories:

  1. decided fully for the Commissioner
  2. decided mostly for the Commissioner but not the full amount or grounds/reasons
  3. decided fully for the taxpayer
  4. decided mostly for the taxpayer but not the full amount
  5. decision unable to be reached on the amount of assessment.
Defined category Definition
Customers in debt

Any customers with overdue debt.

Defined category Definition
Entity type

A classification of customers based on their legal structure and tax obligations. These include companies, diplomatic missions, government departments, individuals, Māori authorities, partnerships, society/clubs, superannuation funds, trusts, unit trusts.

Defined category Definition
Filing channel

We distinguish between three types of filing channels:

  1. e-Filing (a system for registered tax agents to send and receive information electronically)
  2. paper-based filing, and
  3. web (online) filing.
Defined category Definition
Geographic area
  1. Geographic areas are based on Inland Revenue district offices:
    1. Auckland: Manukau, Takapuna
    2. Rest of the North Island: Gisborne, Hamilton, Napier, New Plymouth, Palmerston North, Rotorua, Tauranga, Wellington, Whangarei
    3. South Island: Christchurch, Dunedin, Greymouth, Invercargill, Nelson, Timaru
    4. "Corporates" offices for customers not allocated to a specific geographic area.
  2. At an aggregate level district offices are combined into three major areas: Auckland, Rest of the North Island and South Island, as shown above.
Defined category Definition
GST turnover

GST turnover is calculated from GST returns as the sum of sales and income in the year ended 31 March.
For a two-monthly filer, this would mean the sum of gross sales on six successive GST returns, with the last return being for the period ending 31 March.
The GST tables only include GST collected or refunded by Inland Revenue. GST collected on imports by the New Zealand Custom Service is not included.

Defined category Definition
Individual

Customers not registered for GST or PAYE and not belonging to large enterprises (LE) and non-profit organisations (NPO).

Notes:

  1. This includes individual customers receiving income from business (eg, rental property, shares) but not registered for GST or PAYE.
  2. Where there are overlaps between LE, NPO, SME and individuals, entities are allocated to the group according to the following order of priority. The priorities are:
    1. large enterprises (LE)
    2. non-profit organisations (NPO)
    3. small and medium enterprises (SME)
    4. individuals.
Defined category Definition
Large enterprise (LE)
  1. A non-individual entity which by itself or as a part of a business group has an annual turnover exceeding $100 million (calculated based on GST101 returns), or
  2. an entity belonging to specialist segments as follows:
  • Crown
  • financial
  • high-wealth individuals
  • manufacturing
  • non-resident entertainers
  • non-resident contractors
  • resources
  • services.
Defined category Definition
Liable parent (formerly non-custodial or paying)

A parent of a qualifying child who is normally required to pay child support.

Defined category Definition
Non-profit organisation (NPO)

All entities exempted from income tax and not belonging to large enterprises with the following exemption types:

  • society/club income < $1000
  • amateur sports clubs
  • charity
  • dairy herd society
  • district societies
  • scientific and industrial research
  • veterinary service clubs, or
  • all entities except building societies and friendly societies with "other" exemption type.
Defined category Definition
Overdue child support debt

The amount of an employer's or a liable parent's liability which is in arrears (due, but not paid), together with overdue receiving carer overpayments.

Notes:
 

  1. Child support debt excludes debt New Zealand child support is collecting on behalf of overseas agencies.
  2. This amount includes any penalties applied to the debt. Note that only the overdue penalties component is recognised as a debt from the Crown perspective.
Defined category Definition
Overdue debt case age

The length of time the debt has been overdue.

Defined category Definition
Overdue debt cases

A debt case is created when a due date for payment has passed without full payment being made. Other overdue debt elements may be added as they become overdue. The case will close when all overdue debt has been fully resolved.

Defined category Definition
Overdue debt element

A specific tax type and the period for which a debt is due. A customer can have one or more debt elements.

Defined category Definition
Overdue student loan debt

The amount of repayment obligation for a tax year that is overdue.

Notes:

  1. The definition applies to both residents and overseas based borrowers.
  2. This amount includes any penalties applied to the debt.
Defined category Definition
Overdue tax debt

The amount of tax that remains unpaid after the due date for payment. Overdue tax debt includes any penalty and interest applied to the debt.

Defined category Definition
Overdue Working for Families Tax Credits debt

When recipients are paid more than their entitlement and they don't repay it by the due date a debt is created. The amount includes any penalty and interest applied to the debt.

Defined category Definition
Percentage of payments made on time

The percentage of late payments to the total number of payments per tax year.

Defined category Definition
Percentage of returns filed on time

The percentage of late filings to the total number of filings per tax year.

Defined category Definition
Receiving carer (formerly custodial parent)

A parent or carer of a qualifying child who is normally entitled to receive child support from a liable parent. They must have at least 35% care to receive child support.

Defined category Definition
Registered customer

Registered customers include all customers registered with Inland Revenue, either individuals or entities. Registered customers include some entities and people no longer active.

Defined category Definition
Revenue collected

Revenue collected includes only taxes and duties collected by Inland Revenue. GST collected by the New Zealand Customs Service is excluded. Numbers are unconsolidated.

Note: The Treasury publishes monthly financial statements prepared on a consolidated basis, meaning they eliminate tax transactions between departments, state-owned enterprises and Crown entities.

Defined category Definition
Revenue collected from Liable parents (formerly non-custodial or paying)

Revenue collected from liable parents, includes all revenue collected during each tax year by Inland Revenue including payments related to other time periods.

Defined category Definition
Shortfall penalty

A penalty imposed as a percentage of a tax shortfall (a deficit or understatement of tax),  Shortfall penalties apply to most taxes and duties.  The exceptions are student loan repayments and child support repayments by liable parents.

The law divides these actions into five categories of fault or breach, with a specified penalty rate for each category (Not taking reasonable care, Unacceptable tax position, Gross carelessness, Abusive tax position, Evasion or similar act).

Defined category Definition
Small and medium enterprise (SME)
  1. All entities with an active relationship for GST or PAYE that do not belong to large enterprises or non-profit organisations, and
  2. all non-individual entities without active registration for GST or PAYE not belonging to non-profit organisations.
Defined category Definition
Source deductions

Source deductions include:

  1. PAYE (pay as you earn), and
  2. ESCT (employer superannuation contribution tax), and
  3. SSCWT (formerly known as the specified superannuation contributions withholding tax).
Defined category Definition
Tax agent

A tax agent prepares the annual returns of income for 10 or more customers in one of the following ways:

  • a practitioner carrying on a professional public practice
  • a person carrying on a business or occupation in which returns of income are prepared, or
  • a Māori Trustee.

A tax agent must be a registered Inland Revenue customer.

Defined category Definition
Taxable income

Taxable income for individuals is income on which their personal income tax is assessed for the March year.
For people with IR3 tax returns or Personal tax summaries, this is income from all taxable sources less allowable deductions and losses. People with negative income because of losses are recorded as having nil taxable income in the tables. For people who are non-filers, taxable income is deemed to be their total PAYE gross earnings in the year ended 31 March. PAYE gross earnings can include income from employment, and also taxable welfare benefits, New Zealand Superannuation, earnings-related ACC, student allowances, and paid parental leave.

Defined category Definition
Weighted overdue debt case age

The average age of the case elements weighted by their dollar value.

Defined category Definition
Working for Families Tax Credits

The Working for Families Tax Credits (WfFTC) consists of the following credit types:

  • CTC - child tax credit (was "independent family tax credit")
  • FTC - family tax credit (was "family support")
  • IWTC - in-work tax credit (was "in-work payment"), replaced child tax credit from April 2006. Customers who received child tax credit before 1 April 2006 and don't qualify for in-work tax credit may continue to receive child tax credit
  • MFTC - minimum family tax credit (was - guaranteed minimum family income and then family tax credit)
  • PTC - parental tax credit.

Note: WfFTC was collectively known as "family assistance".