After the end of each tax year, we send out income tax assessment letters showing whether people have a tax refund, tax to pay or have paid the right amount. You do not get a letter if you need to file an individual income tax return - IR3.
The definitions on this page will help you understand your letter and how your tax has been worked out for the year.
Tip: definitions are grouped by topic. For example, you’ll find ‘Total PIE deductions’ under ‘Portfolio investment entity (PIE)’.
Everyone who earns salary or wages in New Zealand pays the ACC earners’ levy. This covers injuries that happen at work, at home, or anywhere else.
Like tax, the levy is automatically taken from your salary or wages.
These are payments from the Ministry of Social Development (MSD). Some have tax taken from them and are included in your end-of-year tax assessment, like the Jobseeker or Sole Parent Support benefits. Some other benefits are not taxable and are not included in your end-of-year tax assessment, like the accommodation supplement or Unsupported Child benefit.
You can claim some expenses against your income, which reduces the tax you pay. For example, the cost of income protection insurance.
Find out what you can claim as expenses in your income tax assessment.
If your letter asks you to complete your assessment, you need to check our records are correct and give us any missing information. The letter will give you more instructions, or you can read more on our page 'Change my income tax assessment details'.
We work out if you’ve paid the right amount of tax. Credit means you’ve paid too much and have a refund (or money to transfer to a different tax debt like child support). Debit means you have more tax to pay.
The ACC earners’ levy is not deducted from income-tested benefits, NZ Super or Student Allowance. Our website has examples of income-tested benefits.
Working for Families Tax Credits are payments you can get to help raise your children. Your entitlement depends on your income and family circumstances.
Find out more about any entitlement you may be able to get.
This is your income before tax or expenses are taken away.
These are payments to contractors (schedular payments) before tax is taken away.
The independent earner tax credit (IETC) is a payment or credit for New Zealand tax residents earning $24,000 to $48,000. You can use it to:
- pay less tax during the year
- get a refund at the end of the year
- reduce your tax debt at the end of the year (including child support).
Find out if you can get the IETC.
This shows the income you earned, how much tax you paid during the year and how much you should have paid. It also shows if you paid too much tax and have a refund, or not enough tax and have more to pay.
Interest is money you earn from having investments (for example, KiwiSaver) and savings in bank accounts. You pay tax on interest you earn.
Gross interest is your interest income before tax is taken away.
An organisation that invests money for its customers (investors) in different types of passive investment (like KiwiSaver).
PIE income – the interest you earn from your investment is counted as income, and you pay tax on it.
PIE loss – if your investment loses money, the PIE organisation claims a tax refund from Inland Revenue. They may then refund money to you.
Total PIE deductions – the total tax you’ve paid on your PIE income. Your provider (the PIE organisation) takes away tax as you earn interest, based on the tax rate (PIR) you’ve given them. You need to make sure your PIR is right or you may have tax to pay at the end of the tax year.
Portfolio investment entity/PIE calculation – we work out if you’ve paid the right amount of tax on the interest you earned from KiwiSaver or other PIEs.
Learn more about how we work out tax on your PIE interest.
Portfolio investment entities (PIEs) for New Zealand residents
This is the tax rate used for interest you earn from a portfolio investment entity (PIE) - for example, KiwiSaver income. You tell your PIE/provider what your rate is. It’s based on your income, and if it’s too low, you may have tax to pay at the end of the tax year.
This is the tax you pay on interest and dividends you earn from New Zealand bank accounts and investments. RWT is taken away from your earnings before they’re paid to you.
These are payments made to contractors. Tax is deducted, but they’re different from salary or wage payments.
This Act gives us the legal right to work out if you’ve paid the right amount of tax.
Any tax that’s already taken away before you’re paid.
The income you’ll pay tax on. This is your total income, minus certain expenses, losses and income types. Find out more about what income is taxable.
New Zealand superannuation (NZ Super) is taxable. This means the Ministry of Social Development (MSD) deducts tax before they pay you.
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