Community-Wise - 2008
Community-Wise Issue August 2008
- Budget 2008 - personal tax rates reduce
- Budget 2008 - working for families tax credits increase
- Language Line update
- Making sure employees are on the right tax code
- KiwiSaver - an easier way of saving
- Personal tax summaries and refunds
- One-stop shop for personal tax summary customers
- Community relationship officers
- Key dates and events
Budget 2008 - personal tax rates reduce
The government is lowering personal tax rates from 1 October 2008. Further changes are scheduled to take effect from 1 April 2010 and 1 April 2011.
The following table shows the current and new income tax rates for 2008-09.
| Taxable income ($) | Old tax rates applying to PAYE for the period 1 April 2008 to 30 Sept 2008 | New tax rates applying to PAYE for the period 1 Oct 2008 to 31 Mar 2009 | Composite tax rates for 2008-09 |
|---|---|---|---|
| 0 to 9,500 | 15%* | 12.5% | 13.75% |
| 9,501 to 14,000 | 21%* | 12.5% | 16.75% |
| 14,001 to 38,000 | 21%* | 21% | 21.00% |
| 38,001 to 40,000 | 33% | 21% | 27.00% |
| 40,001 to 60,000 | 33% | 33% | 33.00% |
| 60,001 to 70,000 | 39% | 33% | 36.00% |
| 70,001 and higher | 39% | 39% | 39.00% |
| *Includes the low income rebate | |||
The composite income tax rates will be used when deciding a person’s annual tax for the 2008-09 income year. This is because when tax rates are changed part-way through a year, as is happening this year, Inland Revenue effectively applies an average of the old and new rates across the entire year’s income. This means that some people may end up having paid too little or too much income tax, especially if their income has changed during the year.
There are other reasons why people may end up paying too little or too much income tax this year.
- While there will be a new 12.5% bottom tax rate, no new matching secondary tax rate has been introduced. Therefore, people who have used a secondary tax code for some of their income, eg, people with more than one job, students with part-time jobs and beneficiaries with part-time jobs, may find they have paid too much tax, especially if their total taxable income was $14,000 or less.
- RWT rates have not been changed so, even though banks and financial institutions will be withholding RWT from interest income at the correct statutory rates, savers may find they have paid too much tax, especially if their total taxable income was $14,000 or less.
People can check if they have paid too little or too much tax by using the personal tax calculator, go to "Work it out", keyword "Income tax".
If they are owed a refund they should then contact Inland Revenue after 31 March 2009 and request a personal tax summary. The calculator and the personal tax summary work out the correct amount of tax due based on all of the person’s taxable income for the year (1 April to 31 March).
Budget 2008 - working for families tax credits increase
From 1 October 2008 family tax credit rates and the income abatement threshold increase to take account of inflation.
People who receive working for families tax credits weekly or fortnightly will automatically receive the new rates from their first payment after 1 October 2008.
The table below shows the existing weekly family tax credit rates and the new rates that apply from 1 October 2008.
| Age/number of children | Current 1 April 2008 | New rate 1 October 2008 |
|---|---|---|
| First child if under 16 | $82 | $86 |
| First child if 16 or over | $95 | $99 |
| Subsequent child rate if under 13 | $57 | $59 |
| Subsequent child rate if 13 to 15 | $65 | $68 |
| Subsequent child rate if 16 or over | $85 | $89 |
If people receive their working for families tax credits in a lump sum after the end of the tax year, Inland Revenue will use an average of the old and new rates to work out their correct entitlement.
The table below shows the existing annual family tax credit rates and the new average (composite) rates that apply for the 2008-09 income year.
| Age/number of children | Current 1 April 2008 | New composite rate for 2008-09 |
|---|---|---|
| First child if under 16 | $4,264 | $4,376 |
| First child if 16 or over | $4,940 | $5,069 |
| Subsequent child rate if under 13 | $2,964 | $3,042 |
| Subsequent child rate if 13 to 15 | $3,380 | $3,469 |
| Subsequent child rate if 16 or over | $4,420 | $4,536 |
The income abatement threshold increases from $35,000 to $35,914 for the 2008-09 income year. This will increase to $36,827 from 1 April 2009.
Find out more information on working for families tax credits.
Language Line update
Following the successful use of Language Line by our families customers, the telephone-based interpretation service became available for all Inland Revenue customers on 1 August 2007. Now, anyone whose first or preferred language is not English can request Language Line when they contact us or when Inland Revenue contacts them.
Requests for interpreters range across the 39 languages offered. The top three languages for Inland Revenue customers continue to be Mandarin, Samoan and Cantonese.
Inland Revenue is continually working with the Office of Ethnic Affairs (OEA) to improve the level of service provided to customers. One of the recent improvements has been the ability for customers to “book” a Language Line interpreter for scheduled appointments. Previously, if a customer came to an appointment and needed an interpreter there was no guarantee the right one would be available when they rang Language Line. Now Inland Revenue and the customer can let Language Line know in advance what type of interpreter is needed and when, and they will be available on the phone for the customer’s appointment.
Apart from the expected decrease over the summer, Inland Revenue’s use of Language Line has almost tripled since the service became available for all tax types and customer contacts.
Language Line was used 209 times in July 2007, while from August 2007 to April 2008 the average monthly use was 596 times.
Making sure employees are on the right tax code
If employees are on the wrong tax and/or student loan repayment code they may not pay enough tax or the correct amount towards their student loan. This means they could end up with a bill at the end of the year.
If an employee is working for salary or wages, but they’re not on the right tax code, Inland Revenue will be writing to their employer and asking for the tax code to be changed to one they’ve supplied. This is to reduce the number of salary and wage earners getting into debt.
A copy of the letter will be sent to the employee to let them know what Inland Revenue is asking the employer to do. If an employee disagrees with this change, they can call Inland Revenue on 0800 227 774.
It’s an employee’s responsibility to choose the correct tax code on the Tax code declaration form (IR330) each time they start a new job and if their income or student loan situation changes. Find out more information about the IR330 form, or call Inland Revenue on 0800 227 774.
KiwiSaver - an easier way of saving
KiwiSaver has been designed to make it easy for New Zealanders to save for their retirement and so far, more than 670,000 people have enrolled and begun making contributions towards their future.
Employees can choose to have 4% or 8% deducted from their salary or wages. Or, if their employer agrees, they can arrange to share the minimum contribution rate of 4%. To find out more visit the KiwiSaver website.
Contributions are paid to Inland Revenue through the tax system and then sent on to scheme providers to invest.
There are many benefits of becoming a KiwiSaver member:
- A one-off tax-free kick-start of $1,000 and a fee subsidy of $40 per year paid to scheme providers.
- Members who are 18 or over are eligible for a member tax credit. The government will match contributions, up to a maximum of $1,042.86 a year.
- A housing subsidy for first home purchases of up to $5,000 after contributing for five years.
- After 12 months of contributing members can have a break from saving by taking a “contributions holiday” of between three months and five years.
- Mortgage diversion - some scheme providers may offer the option of diverting up to half of the contributions to their mortgage.
- From 1 April this year, members who are 18 or over and have contributions being deducted from their salary or wages, will also be eligible for a compulsory contribution from their employer. Employers will have these contributions offset by an employer tax credit of up to $20 per week.
There’s lots of information available about KiwiSaver. Inland Revenue has produced a variety of publications including:
- the KiwiSaver employee information pack (KS3)
- a summary and example brochure (KS40)
- a guide for self-employed people (KS12)
- a guide for children and young people (KS3)
- a general introductory leaflet translated into eight different languages.
These brochures are available from INFOexpress (0800 257 773) and by going to "Forms and guides" keyword "KiwiSaver".
Visit our KiwiSaver website for more information, including links to scheme providers.
KiwiSaver may not suit everybody. The Sorted website has lots of independent information about money matters and can help people decide whether KiwiSaver is right for them.
Find out more about your KiwiSaver obligations if you’re an employer.
Personal tax summaries and refunds
A personal tax summary (PTS) is for salary and wage earners and shows income and tax deduction details for the year, based on employment, pension or benefit information. It compares the tax a customer should have paid with the tax a customer has actually paid. It also shows whether:
- they’ve paid the right amount
- they’re due a refund
- they have tax to pay.
Salary or wage earners could get a tax refund for the 2007-08 year (1 April 2007 to 31 March 2008) if they:
- didn’t work a full year
- used a secondary tax code (S) and earned under $38,000
- are entitled to the child rebate or the income under $9,880 rebate
- earned under $38,000 and received dividends
- had more than one job during the year
- have expenses to claim.
To see if they’re due a refund, customers can use the personal tax summary calculator (they’ll need their income details for the year) go to "Work it out", keyword "Income tax". Customers can use the Look at account information service (if they are registered) to get their income details. Alternatively, they can call INFOexpress on 0800 257 773 to request a Personal tax worksheet (IR746) or a summary of earnings.
If they work out they are entitled to a refund, they’ll need to request a PTS, go to "Get it done online", "Request a Personal tax summary" or by phoning INFOexpress on 0800 257 444.
Find out more information about PTS and refunds.
One-stop shop for personal tax summary customers
Customers calling to request a personal tax summary (PTS) can now confirm it in the same call.
Since 9 June 2008, customers only have to call Inland Revenue and, provided they have all the necessary/correct information, they can request and confirm their PTS at the same time.
The most obvious benefit for customers is that they only need to call once to finalise their PTS square-up. Previously customers had to call Inland Revenue to get a PTS sent out and then call again when they received the PTS to confirm their details and get their refund. Doing it all in one call saves the customers time and, if they’re entitled to a refund, they’ll get it quicker.
Most people who need a PTS will have it sent out to them automatically. However, if income has been received that has not been taxed at the correct rate, eg, interest, customers will need to request a PTS. Customers can also request one if they think they may get a refund. They still have the option to receive their PTS in the mail and to confirm it at a later stage if they choose to.
To check whether you qualify you can use our personal tax calculator, go to "Work it out", keyword "Income tax", or request a personal tax worksheet by calling 0800 257 773. Have your IRD number ready.
Community relationship officers
Our community relationship officers are responsible for educating customers on entitlements and compliance obligations. Refer to the table below to find the community relationship officers in your area.
| Name | Contact number |
|---|---|
| Whangarei | |
| Angela Pearson | 09 986 6000 |
| Luana Poata | 09 986 6028 |
| Leanne Hohaia (Māori Community Officer) | 09 986 6007 |
| James Barrett (Māori Community Officer) | 09 986 6128 |
| Takapuna | |
| Nicola Sharp | 09 984 1641 |
| Linda Fawcett | 09 970 6041 |
| Jason Samuels (Māori Community Officer) | 09 984 1136 |
| Manukau | |
| Helen Lisiua | 09 984 2230 |
| Kevin Mascarenhas | 09 984 2254 |
| Paul Tuisaula | 09 984 2343 |
| Sophie Chungson | 09 984 2332 |
| Christina Fifita | 09 9842376 |
| Anthea Te Moana (Māori Community Officer) | 09 984 2049 |
| Maari Hiakita (Māori Community Officer) | 09 984 2368 |
| Hamilton | |
| Chris Novak | 07 959 0267 |
| Moana Ratima | 07 959 0266 |
| Maureen Thornton (Māori Community Officer) | 07 959 0238 |
| Chrys Thompson (Māori Community Officer) | 07 959 0745 |
| Tauranga | |
| Lorraine Morten | 07 927 5361 |
| Tania Faulkner (Māori Community Officer) | 07 927 5226 |
| Rotorua | |
| Sonia Cooper | 07 921 3809 |
| Edward Nathan | 07 921 3824 |
| Amiria Tomoana (Māori Community Officer) | 07 921 3809 |
| Gisborne | |
| Danny Fong | 06 986 2003 |
| Ian Procter (MāoriCommunity Officer) | 06 986 2028 |
| New Plymouth | |
| Renee Hitchings | 06 968 4050 |
| Naida Tuirirangi (Māori Community Officer) | 06 968 4026 |
| Napier | |
| Paula Nicol | 06 9746331 |
| Nikki Harrison (Māori Community Officer) | 06 974 6359 |
| Palmerston North | |
| Craig Riley | |
| Philippa McNae | 06 953 3096 |
| Charmaine Ratima (Māori Community Officer) | 06 953 3026 |
| Rhys Mohi (Māori Community Officer) | 06 953 3105 |
| Wellington | |
| Brian Woolford | 04 890 1037 |
| Iriea Williams | 04 890 3294 |
| Tracey Taylor | 04 890 1153 |
| Ruta Wright (Māori Community Officer) | 04 890 1169 |
| Luke Schaumkell (Māori Community Officer) | 04 890 1009 |
| Nelson | |
| Kaye Latham | 03 989 6000 |
| Margaret King | 03 989 6158 |
| Dayveen Stephens (Māori Community Officer) | 03 989 6146 |
| Greymouth | |
| Juliette Henry | 03 906 0317 |
| Christchurch | |
| Katie Collins | 03 968 0765 |
| Mary Jane Heu (Māori Community Officer) | 03 968 0792 |
| Nicole Manawatu (Māori Community Officer) | 03 968 0648 |
| Denise Te karu (Māori Community Officer) | 03 968 0380 |
| Christchurch/Timaru | |
| Don Amyes | 03 968 0488 |
| Dunedin | |
| Cindy Henry | 03 951 2011 |
| Kiwhare Mihaka (Māori Community Officer) | 03 951 2087 |
Key dates and events
| Date | Event |
|---|---|
| Early August Child support |
End-of-year square-up completed for paying parents who estimated their income for the previous child support year. |
| 30 September Student loans |
The second instalment of non-resident assessment due from borrowers living overseas. |
Download ›
PDF | 548kb | 8 pages
Download Acrobat Reader to view PDF files
Report an accessibility problem for this page
Date published: 20 Apr 2009
Back to top