Paying tax on your salary or wage
If your income is from salary, wages, benefits or taxable pensions, your tax will automatically be deducted under the pay-as-you-earn (PAYE) system. This means when you get your weekly, fortnightly, or monthly pay, your tax has already been deducted from it.
What is PAYE?
PAYE is the tax your employer deducts from your salary and wages. It includes:
- the tax rate for your income, and
- an ACC earners' levy
See "Find out more" below for information about tax rates and ACC earners' levy.
What you need to do
Follow these steps to pay tax on your salary or wage income:
- Give your IRD number to your employer or payer, so the correct amount of tax is deducted from your pay. If you don't have an IRD number, you need to complete an IRD number application - individual (IR595) form.
- Complete a Tax code declaration (IR330) form, sign it and give it to your employer. See "Find out more" below to work out which tax code you should use.
If you have a student loan your employer will deduct your PAYE and your student loan repayments from your pay. See "Find out more" below to work out which tax code to use if you have a student loan.
Note: If you don't complete a tax code declaration, your tax will be deducted at the no-declaration rate of 45 cents in each dollar.
What happens next
Your employer will update your tax code and will send your PAYE deductions to us. It's a good idea to check you're on the correct tax code on your next payslip.
Check the amount of PAYE you should be paying
You can check that your employer is deducting the correct amount of PAYE from each pay by using the PAYE calculator under "Work it out".
Most people who earn salary or wages pay the correct amount of tax during the year. However, if you're employed for only part of the year, or have more than one job, you could be entitled to a tax refund at the end of the year.
To get this refund you'll need to receive a personal tax summary. See "Find out more" below for information about personal tax summaries.
How can I find out how much I earned for the year?
If you're registered for our Look at Account information service, you can view your earnings information online. You need to be registered for this service.
Or, you can get your earnings information using by our Request a summary of earnings service. Your summary of earnings shows how much income you received how much tax was deducted by each employer.
Note
From 1 April 2008, employees who received a redundancy payment on or after 1 December 2006 may be able to claim a 6% redundancy tax credit, up to a maximum of $3,600. Find out how you can make the claim.
Find out more
Next steps
Date published: 27 Mar 2008
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