For individuals & families: When you retire
Tax on your income when you retire
There are some tax matters that may affect you when you retire:
- tax on investment and other income
- using the correct tax code
- tax on overseas pensions.
Tax on investment and other income
If you receive New Zealand Superannuation and interest or investment income, you need to ensure that the correct amount of tax is deducted from the interest or investment income.
| If you ... | then ... |
|---|---|
| have not elected the rate the RWT (resident withholding tax) to be deducted | RWT will be deducted at 19.5%. |
| earn between $40,000 and $70,000 | you should elect the 33% rate as it will help you pay the right amount of tax during the year. |
| earn over $70,000 | you should elect the 39% rate as it will help you pay the right amount of tax during the year. |
| have a joint account | you'll need to decide the appropriate rate of RWT to be deducted, as the account can only be under one IRD number. If one account holder earns more than the other account holder, we recommend that you use the RWT rate for the higher earner. This avoids the higher earner ending up with a tax bill at the end of the year, when the interest is split between both of your accounts. |
| Note | |
|---|---|
|
If you need to change the RWT rate on your interest or investment income, complete the Choose your RWT deduction rate (IR456) form (go to "Forms and guides") and give it to your interest payer, so they can deduct the correct amount of RWT. Some interest payers will change your RWT rate over the phone or internet. |
|
Using the correct tax code
If you receive New Zealand Superannuation and income from another source (excluding interest or investment income), you need to ensure that you are using the correct tax code.
| If the tax code is for ... | then ... |
|---|---|
| your highest source of income | you should use the "M" tax code. |
| income from other sources |
you should choose:
|
| Note | |
|---|---|
|
If your New Zealand Superannuation is not your highest source of income, or if you have a student loan, you may want to apply for a special tax code. Find out more about special tax codes or see our guide How to tell if you need a special tax code or deduction rate (IR23G) - go to "Forms and guides" . |
|
Tax on overseas pensions
Social security pensions
If you are receiving an overseas pension, generally you must include a social security pension in your tax return as a New Zealand tax resident, even if that pension is paid into a bank account outside New Zealand.
If your overseas pension is less than the New Zealand Superannuation rate (and you are entitled to receive a New Zealand benefit or pension), Work and Income will top up your overseas pension to equal the New Zealand Superannuation rate.
For more information, see our Overseas social security pensions (IR258) booklet - go to "Forms and guides".
Overseas private pensions
There are a number of different tax requirements which may apply to overseas private pensions. For more information, see our Overseas private pensions (IR257) booklet - go to "Forms and guides".
Change of address or phone number
If these have changed, please contact us so we can update your details, and keep you up to date with information that may affect you. Go to "Get it done online" >"Changed your address and phone number?" or "Forms and guides" to use our form "Have you changed your name, address or phone number? (IR238)"
Date published: 09 Jun 2009
Back to top
