What You Need to Know about IRD numbers and Tax.
What is an IRD number?
An IRD number is a unique identification number from Inland Revenue – and it will last you your whole life. You need to have your IRD number handy every time you deal with the Inland Revenue. Your employer and your bank also need your IRD number to take out the correct amount of tax from any money you earn.
What is my Tax Rate?
For most students and part time workers your tax rate is most likely 10.50%. This is a current applicable rate for anyone who earns $14,000 or less in a single tax year.
If you earn greater than $14,000 and less than $48,001, the rate applicable would be 17.50% on the amount over $14,000 and remains 10.50% on the amount below – rates are tiered!
The NZ tax year runs from the 1st April to the 31st of March the following year.
If you don’t have an IRD number, your employer will deduct income tax at the highest “non-declaration” tax rate of 45% so it’s vitally important you use the right tax rate and tax code (see below). Note that any over-payment or underpayment of Tax is fixed when you file your annual tax return.
Tax Codes
Tax codes help ensure you are paying the right level of tax. The best way to establish what you own code is would be you use the IRD’s “Find Your Tax Code” calculator on their website. Link below.
http://www.ird.govt.nz/how-to/taxrates-codes/codes/
Filing a Tax Return
If the correct tax rate has been applied to your salary or wages then you do not need to file a tax return. If however, you receive income that has not been taxed or all or part was taxed at the incorrect rate, then you will need to file a tax return. Please refer to the IRD’s website for more details and access to Tax Return forms.
Key Points For Getting an IRD Number:-
• Need to Complete IR595 (or similar for non-resident or non personal (company / trust) applications
• Form needs to be returned completed and signed to Postshop or AA Drivers Licencing Agent.
• Two forms of ID required when submitting forms – most commonly Passport or Birth Certificate, and one other form of ID such as Student Photo ID / Drivers Licence
• If you are under 16 your parent s need to apply on your behalf.
Forms:-
http://www.ird.govt.nz/forms-guides/title/forms-i/ir595-form-individualirdapp.html?id=righttabs