Base Tax rates on income for New Zealand residents are currently as follows:
|tax||on annual earnings|
|19.5%||up to $38,000|
|33.0%||between $38,000 and $60,000|
For example, a labourer earning $600 per week would earn $31,200 before taxes over the course of a year. Income taxes paid (through PAYE) would be 31200 * 0.195 = $6084, or $117 per week.
An IT specialist earning $100,000 per year would pay taxes as follows:
|38000 * 0.195||=||$7410|
|(60000-38000) * 0.33||=||$7260|
|(100000-60000) * 0.39||=||$15600|
For a total tax burden of $30,270 and an effective income tax rate of 30.3% on their salary.
Actual taxes deducted or owed throughout the year may differ if you earn other income through a second job, business or investments, if you partake in the kiwisave scheme, or if you are required to make payments to your student loan.
Tax rates are a hot topic in this year's coming elections so expect to see lower tax rates on earnings from the 2009 tax year.