As an employee you must complete a Tax code declaration (IR330). This tells your employer the rate of PAYE to deduct including any student loan. As a contractor receiving schedular payments you must complete a Tax rate notification for contractors (IR330C). This informs the payer the amount of tax to deduct from your payments. Note: contractors don't have student loan repayments deducted from their payments.
Different tax codes apply to different income sources. If your income source changes, for example you:
you may need a new tax code.
It's important that you use the right tax code for your situation or you'll pay too little or too much tax. This could mean you end up with a tax bill at the end of the year.
You need a separate tax code for each source of income which has tax deducted before it's paid to you. You'll have a primary tax code for your main source of income and secondary tax codes for any other sources.
You're a New Zealand tax resident in any of these situations:
Working for Families Tax Credits (WfFTC) is financial help for families who have dependent children aged 18 or under.
Income-tested benefits include:
Veteran's Pension is a fortnightly payment for veterans who have served in a war or other emergency, and have a disability.
Note: if you receive either, Weekly Income Compensation (WIC) or Weekly Compensation (WC) paid by Veterans? Affairs New Zealand, these payments are deemed as salary or wages.
If you are a contractor in certain types of work, tax will be deducted from your earnings at a flat rate unless you have a certificate of exemption or 0% special tax rate . Find out about the activities and their tax rates. Read the Self-employed or an employee? IR336 guide.
Casual agricultural workers are engaged in casual seasonal agricultural work on a day-to-day basis for up to three months. Casual agricultural workers include shearers and shed hands.
Election day workers are people employed on a casual basis immediately before, on, or after polling day.
You're a recognised seasonal worker if you have an RSE limited visa and plant, maintain, harvest, or pack crops.
You're a foreign fishing worker if you hold a work visa as foreign crew of a vessel fishing New Zealand waters.
A special tax code is a tax rate worked out to suit your individual circumstances.
If you need to change your tax code or you start working for a new employer you need to complete a Tax code declaration (IR330) form. If you don't complete an IR330 your employer will use the no-notification tax code, which deducts a much higher amount of tax.
If you start a contract with a new payer and receive schedular payments you'll need to complete a Tax rate notification for contractors (IR330C) form. If you don't complete an IR330C tax will be deducted from your payments at the no-notification rate.
If you have more than one source of income you'll need a secondary tax code. Secondary income has a different rate of tax deducted from it.
If you're receiving salary or wages and you usually receive a large income tax bill or refund, it's a good idea to apply for a special tax code. A special tax code gives you a tax rate worked out to suit your individual circumstances.
A special tax rate may be useful if you're a contractor receiving schedular payments and the minimum rate of tax you can choose to use is too high. For example if you have losses to carry forward.
Income tax rates are applied to your combined income at the end of the tax year to work out your actual tax obligation. You can use our Tax on annual income calculator to help you work out how much tax you'll pay for the year or go to our list of current income tax rates.
Our PAYE / KiwiSaver deductions calculator can help you work out your take-home (net) pay. This calculator includes deductions such as PAYE, KiwiSaver, child support and student loan repayments.