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For individuals & families
Te hunga takitahi me ngā whānau

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 right tax code
  • tax on overseas pensions.

Tax on investment and other income

If you receive NZ Super 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 RWT (resident withholding tax) you wish to use RWT will be deducted at 17.5% for existing accounts and 33% for accounts opened from 1 April 2010.
have not supplied your IRD number to your interest payer RWT will be deducted at 33%.
earn $14,000 or less you should elect the 10.5% rate as it will help you pay the right amount of tax during the year.
earn from $14,001 to $48,000 you should elect the 17.5% rate as it will help you pay the right amount of tax during the year.
earn from $48,001 to $70,000 you should elect the 30% rate as it will help you pay the right amount of tax during the year.
earn over $70,000 you should elect the 33% 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 our Choose your RWT deduction rate (IR456) form 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 right tax code

Your main source of income

If you receive NZ Super and income from another source (excluding interest or investment income), you need to ensure that you are using the right tax code.

Find out about main tax codes

Your secondary source of income

If your NZ Super is not your main source of income or you have a secondary source of income, you need to use a secondary tax code.

Find out about secondary tax codes

Tax on overseas pensions

Social security pensions

If you're 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 NZ Super 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 NZ Super rate.

For more information see our Overseas social security pensions (IR258) guide.

Overseas private pensions

There are a number of different tax requirements which may apply to overseas private pensions. For more information see our Overseas pensions and annuity schemes (IR257) guide.

Receiving NZ Super or Veteran's Pension

If you receive NZ Super or Veteran's Pension (with no tax deducted) and travel overseas, you will need to pay New Zealand tax on the payments you receive if you are:

  • travelling overseas for more than 26 weeks, and
  • not residing in an overseas country.

You'll need to file an Individual tax return (IR3) as you have received income that has not been taxed at source. This income should be included in the "overseas income" box in the return as this includes income received while overseas. You may also need to make provisional tax payments.

If you don't receive an IR3 return by the end of May, you can file online or request a paper copy by calling 0800 377 774.

Weekly Income Compensation (WIC) payments received while you are abroad for any number of weeks, including situations when you are not a New Zealand tax resident, are taxable in New Zealand.

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. Use our Changed your address and phone number? service or complete our Have you changed your name, address or phone number? (IR238) form.