This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our PRIVACY POLICY for more information on the cookies we use and how to delete or block them.
  • Tax Stats

Tax Stats 2020/2021

A guide to key New Zealand tax stats and facts

 

ACC Levies

 

ACC employer levies are determined based on the risk of accident in a particular industry.
 

ACC employee levy details for the 2020/2021 year: 

Maximum Liable Earnings   $130,911 (aged 18 or over)

Earners Levy (incl. GST)   $1.39 per $100 earnings (aged 18 or over)

 

Donations

 
Individuals
A tax credit is available on qualifying donations not exceeding the taxpayer’s taxable income for the year:
Donation tax credit minimum $5
Donation tax credit 1/3 of the qualifying donations

 

Companies (other than Look-Through Companies)
Qualifying donations are tax-deductible, but only to the extent that the donations do not exceed the company’s net income for the year.

Employer’s Superannuation Contribution Tax (ESCT)

Employer’s Superannuation Contribution Tax (ESCT) is deducted from an employer’s superannuation contributions. The ESCT rate is based on the total of the employer contributions and the employee’s salaries/wages (for the previous year if employed for all of the previous year):

Threshold Amount ESCT Rate
$0 - $16,800 10.5% on all contributions
$16,801 – $57,600 17.5% on all contributions
$57,601 - $84,000 30% on all contributions
Over $84,000 33% on all contributions

Alternatively, the employer contributions can be taxed as salary and wages under the PAYE rules if the employee agrees

Income Tax Return Due Dates

 

Balance Date Income Tax Return Due Dates​
If taxpayer is “linked” to a tax agent * -
31 March the following 31 March
From 1 Apr to 30 Sep 31 March after the end of the income year
From 1 Oct to 30 Mar 31 March after the end of the next income year
If taxpayer is not “linked” to a tax agent -
From 1 Apr to 30 Sep 7th day of the 4th month after the end of the income year
From 1 Oct to 31 Mar 7 July after the end of the income year
*Under “extension of time” arrangements. Taxpayers failing to file returns by the due date may lose their extension of time, resulting in earlier return and terminal tax payment dates for subsequent income years.

 

Income Tax, RWT and NRWT

Income Tax:​
 
INDIVIDUALS
Taxable Income : 2019/20 and 2020/21 Tax Years Tax Rate
$1 - $14,000 10.5%
$14,001 - $48,000 17.5%
$48,001 - $70,000 30%
Over $70,000 33%

 

Companies (other than LTCs): 28%
Complying Trusts:
Trustees 33%
Beneficiaries Individual rates apply (see above)
- except for minors 33%
(<16 years on the balance date of the trust, where a guardian or relative (or associate of these) has made a qualifying settlement on the trust and the beneficiary income amount is > $1,000)
Maori Authorities: 17.5%

 

Resident Withholding Tax (RWT):
Dividends: 33%
Dividends paid by a QC, a LTC, and dividends within the same company group (≥ 66% common shareholding) are exempt from RWT.

From 1 April 2017, a fully-imputed dividend paid to another company (other than an LTC) is exempt from RWT if the payer chooses that option.

Dividend RWT payments due by 20th of the following month.
Interest:
Individuals 10.5%, 17.5%, 30% or 33%
Companies 28% or 33%

Rate depends on certain criteria and whether rate election made. From 1 April 2020 the 'non-declaration' rate for RWT on interest income is 45% if the recipient has not supplied an IRD number. If they have supplied an IRD number but not specified a rate, the 'default' rate of 33% will apply.

Interest paid within the same company group (≥ 66% common shareholding) is exempt from RWT.

 

Interest RWT payment dates:

EXPECTED TOTAL RWT DUE DATE
More than $500 per month 20th of the following month
$500 or less per month 1 April to 30 September - due 20 October
1 October to 31 March - due 20 April

For a 6-monthly filer, if interest RWT deductions exceed $500 per month for a 2-month period, the RWT must be paid to the IRD by the 20th of the following month.

Non-Resident Withholding Tax (NRWT):
Interest 15%*
Dividends
- fully imputed 15% (0% in certain circumstances)
- not fully imputed 30%
Royalties 15%
*0% (in relation to some corporate bonds), or 2% if loan is subject to approved issuer levy

Where a double tax treaty exists, the rate of non-resident withholding tax may be reduced. A company paying an imputed dividend and supplementary dividend to a foreign shareholder may be entitled to claim a foreign investor tax credit.

NRWT payment dates:

EXPECTED TOTAL NRWT DUE DATE
$500 or more per year 20th of the following month
Less than $500 per year 1 April to 30 September - due 20 October
1 October to 31 March - due 20 April

For a 6-monthly filer, if NRWT deductions reach $500 during a tax year, the NRWT must be paid to the IRD by the 20th of the following month. Monthly returns are then required for the remainder of the year.

RWT & NRWT returns and reporting requirements:

Please note that from 1 April 2020, there are new reporting rules for payers of “investment income”. In some cases, income needs to be reported to the IRD by the payer even if no tax needed to be withheld from the payment.

Income Tax Payment Due Dates

Month of Balance Date:

PROVISIONAL TAX INSTALMENTS (ONLY FOR STANDARD UPLIFT AND ESTIMATION METHODS)
1st 2nd 3rd
28 Mar 28 Jul 28 Nov
TERMINAL TAX
7 Nov
The above terminal tax dates assume the taxpayer is linked to a tax agent.
PROVISIONAL TAX INSTALMENTS (ONLY FOR STANDARD UPLIFT AND ESTIMATION METHODS)
1st 2nd 3rd
7 May 28 Aug 15 Jan
TERMINAL TAX
7 Dec
The above terminal tax dates assume the taxpayer is linked to a tax agent.
PROVISIONAL TAX INSTALMENTS (ONLY FOR STANDARD UPLIFT AND ESTIMATION METHODS)
1st 2nd 3rd
28 May 28 Sep 28 Jan
TERMINAL TAX
15 Jan
The above terminal tax dates assume the taxpayer is linked to a tax agent.
PROVISIONAL TAX INSTALMENTS (ONLY FOR STANDARD UPLIFT AND ESTIMATION METHODS)
1st 2nd 3rd
28 Jun 28 Oct 28 Feb
TERMINAL TAX
7 Feb
The above terminal tax dates assume the taxpayer is linked to a tax agent.
PROVISIONAL TAX INSTALMENTS (ONLY FOR STANDARD UPLIFT AND ESTIMATION METHODS)
1st 2nd 3rd
28 Jul 28 Nov 28 Mar
TERMINAL TAX
7 Mar
The above terminal tax dates assume the taxpayer is linked to a tax agent.
PROVISIONAL TAX INSTALMENTS (ONLY FOR STANDARD UPLIFT AND ESTIMATION METHODS)
1st 2nd 3rd
28 Aug 15 Jan 7 May
TERMINAL TAX
7 Apr
The above terminal tax dates assume the taxpayer is linked to a tax agent.
PROVISIONAL TAX INSTALMENTS (ONLY FOR STANDARD UPLIFT AND ESTIMATION METHODS)
1st 2nd 3rd
28 Sep 28 Jan 28 May
TERMINAL TAX
7 Apr
The above terminal tax dates assume the taxpayer is linked to a tax agent.
PROVISIONAL TAX INSTALMENTS (ONLY FOR STANDARD UPLIFT AND ESTIMATION METHODS)
1st 2nd 3rd
28 Oct 28 Feb 28 Jun
TERMINAL TAX
7 Apr
The above terminal tax dates assume the taxpayer is linked to a tax agent.
PROVISIONAL TAX INSTALMENTS (ONLY FOR STANDARD UPLIFT AND ESTIMATION METHODS)
1st 2nd 3rd
28 Nov 28 Mar 28 Jul
TERMINAL TAX
7 Apr
The above terminal tax dates assume the taxpayer is linked to a tax agent.
PROVISIONAL TAX INSTALMENTS (ONLY FOR STANDARD UPLIFT AND ESTIMATION METHODS)
1st 2nd 3rd
15 Jan 7 May 28 Aug
TERMINAL TAX
7 Apr
The above terminal tax dates assume the taxpayer is linked to a tax agent.
PROVISIONAL TAX INSTALMENTS (ONLY FOR STANDARD UPLIFT AND ESTIMATION METHODS)
1st 2nd 3rd
28 Jan 28 May 28 Sep
TERMINAL TAX
7 Apr
The above terminal tax dates assume the taxpayer is linked to a tax agent.
PROVISIONAL TAX INSTALMENTS (ONLY FOR STANDARD UPLIFT AND ESTIMATION METHODS)
1st 2nd 3rd
28 Feb 28 Jun 28 Oct
TERMINAL TAX
7 Apr
The above terminal tax dates assume the taxpayer is linked to a tax agent.
 

 

KiwiSaver

 

New employees Automatically enrolled, unless they opt out
Existing employees Can elect to join
Self-employed Can voluntarily join
Not employed Can voluntarily join

 

Members/employees:
Employee contributions Minimum 3% of gross earnings
Member tax credit Matches 50 cents for every dollar of contribution paid into scheme (except if the member is older than 65).
Maximum tax credit $521.43 per year (nil if the member is older than 65).

 

Employers:
Employer contributions At least 3% of gross earnings, less ESCT (see below)
Employer tax credit None

 

Employers deduct the employee’s contribution from their earnings, add their employer contribution, and pass this on via the IRD to an approved scheme provider for investment on the employee’s behalf.

Effective from 1 July 2019, people over 65 can now join a KiwiSaver scheme, but it is voluntary for employers to contribute for employees who are 65 or older.

See also the Employer’s Superannuation Contribution Tax (ESCT) section.

 

PAYE on Salaries & Wages

 

Deductions from Due date
1st to 15th of month 20th the same month.
16th to last day of month 5th of the following month, except for the 2nd December payment which has a due date of 15 January


Concession for small employers:
If the total PAYE (including ESCT) was less than $500k in previous year, there is only one payment due by the 20th of the following month.

New employers:
A new employer can apply the small employer concession. However, if the total PAYE (including ESCT) goes over $500,000 during the first year of employing, the employer needs to switch to two payments per month (as per the above table).

Other tax types:
Employee ACC Earner Premiums, Student Loan repayments, Kiwisaver deductions, Kiwisaver employer contributions and Child Support deductions are all payable in the same manner.

 

PAYE on Schedular Payments

 

PAYE is a tax which is deducted at source from salary and wage payments. However, other types of payments for services might also need to have tax deducted at source. These payments would be for work done by non-employees - e.g. company directors, committee members, contractors, sales agents, entertainers, sportspeople.

If a particular activity is mentioned in Schedule 4 of the income tax legislation, a payment in relation to that activity could be a “schedular payment” which will need a special tax deduction.

There are some exemptions from the schedular payment rules:

  • a payment for services provided by a public authority, a local authority, a Maori authority
  • a payment made to a company, if the company is not one of the following : a non-resident contractor, a non-resident entertainer, a company involved in a “labour-hire arrangement” (see below), an agricultural, horticultural, or viticultural company
  • a payment covered by an exemption certificate (a certificate is not allowed for some taxpayers, including taxpayers involved in a “labour-hire arrangement”)
  • a payment for services provided by certain non-resident contractors

New schedular payment rules from 1 April 2017

Labour-hire arrangements are now subject to the schedular payment rules. These arrangements are generally where:

  • one of the payer’s main activities is the business of arranging for a person (or persons) to perform work or services directly for clients of the payer, and
  • the payment is made under an arrangement where some or all the work is done by the payee directly for a client of the payer, or directly for a client of another person, and
  • the payer and payee are not “associated persons” (a special definition applies), although the payer can choose to deduct tax from a payment to an associated person

Voluntary schedular payments:

  • if a taxpayer’s activity is not otherwise subject to the schedular payment rules, they can now elect into the rules
  • this election can also be used by a company to whom payments would otherwise be exempt from the rules

Withholding rate elections:

  • a taxpayer who is subject to the schedular payment rules (other than a non-resident entertainer) is now able to elect their own withholding rate, as long as it is not less than the relevant minimum rate
  • minimum withholding rates : 15% if the payee is either a non-resident or the holder of a temporary entry class visa as defined in section 4 of the Immigration Act 2009; 10% in all other cases
  • in order to use a rate which is less than the minimum rate, or to have a zero rate when a certificate of exemption is not allowed, a taxpayer can apply to Inland Revenue for a special tax code certificate (also known as a tailored tax code certificate)

 

Provisional Tax

 

Taxpayers who have a year-end “residual income tax” (RIT) liability exceeding $2,500 (increased to $5,000 from the 2021 income year onwards) are generally required to pay instalments of provisional tax. Provisional tax payment dates are aligned with GST payment dates, depending on the GST status and the method used. Most taxpayers pay provisional tax in three instalments, with a payment cycle of five, nine and thirteen months after the start of the income year (see also the Income Tax Payment Due Dates section). However, taxpayers who file six-monthly GST returns pay their provisional tax in two instalments, with a payment cycle of seven and thirteen months after the start of the income year.

Taxpayers are able to use a tax pooling system to manage their provisional tax payments. Refer to the Tax Pooling section for more details.


Standard method calculations for the 2020 & 2021 tax years:

2020 tax year
  2019 tax return filed 2019 tax return not filed
Companies/PIEs 105% 2019 RIT 110% 2018 RIT
Trusts & Estates 105% 2019 RIT 110% 2018 RIT
Individuals 105% 2019 RIT 110% 2018 RIT
2021 tax year
  2020 tax return filed 2020 tax return not filed
Companies/PIEs 105% 2020 RIT 110% 2019 RIT
Trusts & Estates 105% 2020 RIT 110% 2019 RIT
Individuals 105% 2020 RIT 110% 2019 RIT

Final instalment calculation (only applicable from the 2020 tax year onwards) : if a taxpayer expects their RIT for the current tax year to be $60,000 or more, and has used the standard method for all of the instalments to date, their final instalment amount can be based on the expected RIT less the total of the earlier instalment amounts – they do not need to use the estimation method just for their final instalment.

Estimation method

A taxpayer can estimate or re-estimate their provisional tax up until the last instalment date.

GST ratio method

If a taxpayer is eligible for this method, they base their provisional tax payments on a percentage of the GST taxable supplies, and there are six instalments per year.

Accounting income method (AIM) – new from the 2019 tax year

If a taxpayer is eligible for this method, they base their provisional tax payments on current year tax-adjusted accounting income. AIM-capable accounting software needs to be used. Taxpayers registered for monthly GST returns make twelve provisional tax payments per year. Those who are not GST-registered, or who are registered for two or six-monthly GST returns, will make six payments per year. A taxpayer can switch to the AIM method part way during a tax year if certain conditions are met

Interest payable on underpayment or overpayment of provisional tax

Special rules apply if a taxpayer uses the GST ratio method or the accounting income method.

For all other taxpayers, one of the following calculation start dates will apply if any of these statements is true:

  • the year’s residual income tax is at least $60,000, or
  • the year’s provisional tax was estimated, or
  • not all instalments were paid on time, or
  • there has been a “provisional tax interest avoidance arrangement”

From the last instalment date, if all of the following statements are true:

  • all the instalments were calculated using the standard method, and
  • all instalments were paid on time, and
  • all “provisional tax associates” also calculated all their instalments using the standard method OR used the GST ratio method, and
  • there has been no “provisional tax interest avoidance arrangement”

From the first instalment date in all other cases

(Note: the above rules are different from those which applied for the 2018 and 2019 tax years)

 

Tax Penalties

 

A tax shortfall can incur the following penalties:

Lack of Reasonable Care

20% penalty

Unacceptable Tax Position*

20% penalty

Gross Carelessness

40% penalty

Abusive Tax Position

100% penalty

Evasion

150% penalty

 

Penalties may be increased for:

Obstruction

25% penalty increase

 

Penalties may be reduced if shortfall is:

Disclosed before audit

100% penalty reduction for lack of 
reasonable care or taking an unacceptable
 tax position

Disclosed before audit

75% penalty reduction in all other cases

Disclosed before audit

40% penalty reduction

Temporary shortfall

75% penalty reduction

*Shortfall penalty for taking an unacceptable tax position only applies to income tax (not GST or withholding tax).

 

Penalties may be further reduced if the taxpayer satisfies the criteria for:

‘Previous good behaviour’

50% further penalty reduction

 

Late filing penalties

Income Tax Returns:
Net income (before losses) Penalty
Under $100,000 $50
$100,000 – $1,000,000 $250
Over $1,000,000 $500

 

GST Returns:
Payment Basis $50
Hybrid $250
Invoice Basis $250

 

Other:
ICA Returns $250
Reconciliation statements $250
Employer schedules $250
Investment income reporting non-compliance $250

 

Late payment penalties:

Initial late payment penalty 1% (the day after due date)
Then, after a week 4% (seven days after due date)
Then, after each month 1% incremental increase (Note: no incremental penalties for some tax types for periods after 31 March 2017)

 

Non-payment penalties (employer deductions):
Non-payment penalty (in addition to late payment penalty) 10%
A further 10% will be added each month an amount remains outstanding up to a maximum of 150%.

 

Tax Pooling

 

Taxpayers are able to use a tax pooling system to manage their provisional tax payments. Tax payments can be purchased or sold at pre-determined dates through an intermediary. Using a tax intermediary can give the seller a better interest rate return. For a purchaser, it can mean a reduced interest cost and, in certain circumstances, reduced penalties.

Tax pooling can also be used to purchase other types of tax in certain circumstances.

 

Use of Money Interest (UOMI)

 

In some circumstances, the IRD can charge or credit interest on underpayments or overpayments of most types of tax.

UOMI rates:
Payable to the IRD on underpayments 8.35% from 29/08/19
Payable by the IRD on overpayments 0.81% from 29/08/19


(See also the Tax Pooling section and the Provisional Tax section)