Work out your tax code
Important
You may be eligible for the independent earner tax credit (IETC). Use our decision tree to determine if you are eligible for the IETC and whether you should change your tax code to ME or ME SL.
When you may need to find out your tax code
- you start a new job
- you think you may start or stop being eligible for the IETC (see "Definitions" below)
- you have more than one job, so your total annual income moves into a different tax bracket (see "Definitions" below)
- you have a student loan, so you need to start making repayments because your annual income goes over the student loan repayment threshold (see "Definitions" below) or
- you have paid off your student loan, so you no longer need to make repayments.
Tax code table
See a list of tax codes and their application.
Next steps to work out your correct tax code
| If you receive ... | then ... |
|---|---|
|
use our decision tree to work out your tax code.
|
| a benefit, and start work | specific rules apply, so find out your tax code here. |
| other types of payments |
|
Find out what to do if you have a special tax code.
Definitions
Annual net income
Net income means your total income from all sources less any allowable deductions or current year losses (not including any losses brought forward).
If your only income is from your salary or wages (and you don't have any allowable expenses for example, income protection insurance) your net income will be your annual salary or wages before tax.
Independent earner tax credit (IETC)
The IETC is for New Zealand tax residents with a net income between $24,000 and $48,000 in a tax year (1 April to 31 March) and don't receive:
- working for families tax credits
- an income tested benefit, including:
- domestic purposes benefit
- emergency benefit
- independent youth benefit
- invalids' benefit
- sickness benefit
- unemployment benefit
- widows' benefit
- NZ Super
- a Veteran's Pension, or
- a foreign equivalent of any of the above.
From 1 April 2009 eligible tax payers earning between $24,000 and $44,000 will be entitled to tax credit of $10 each week. For eligible tax payers earning over $44,000, the IETC decreases by 13 cents for every additional dollar earned.
Special tax code/student loan special repayment deduction rate
A special tax code is a tax deduction rate worked out to suit your individual circumstances. If you usually receive a large income tax/student loan bill or refund, or want to pay off your student loan faster, it's a good idea to apply for a special tax code or deduction rate. This ensures you pay the right amount of tax or student loan deductions.
Student loan repayment threshold
If you have a student loan you must begin repaying your student loan as soon as your total annual income (from 1 April to 31 March) goes over the student loan repayment threshold.
Tax brackets
Find out the current income tax rates including and excluding earners' levy for individuals.
Date published: 20 Nov 2009
Back to top
