What is the New Personal Income Tax Scale in New Zealand?
|
The new personal income tax scale |
||||
|
|
Tax rates and thresholds |
|||
|
Current |
15% |
21% |
33% |
39% |
|
up to |
$9,500 |
$38,000 |
$60,000 |
above $60,000 |
|
New |
12.5% |
21% |
33% |
39% |
|
from 1 October 2008 |
$14,000 |
$40,000 |
$70,000 |
above $70,000 |
|
from 1 April 2010 |
$17,500 |
$40,000 |
$75,000 |
above $75,000 |
|
from 1 April 2011 |
$20,000 |
$42,500 |
$80,000 |
above $80,000 |
For example from 1 April 2011, an individual earning $40,000 pa pays 12.5% tax on the first $20,000 of income and 21% tax on the remaining $20,000.
|
Who pays income tax and how much? |
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|
Annual individual taxable income ($) |
Number of people |
Tax paid |
|||
|
(000) |
% |
($m) |
% |
||
|
Zero |
239 |
7 |
0 |
0 |
|
|
1 – 10,000 |
442 |
14 |
248 |
1 |
|
|
10,000 – 20,000 |
841 |
26 |
1,968 |
8 |
|
|
20,000 – 30,000 |
372 |
11 |
1,592 |
6 |
|
|
30,000 – 40,000 |
339 |
10 |
2,191 |
8 |
|
|
40,000 – 50,000 |
314 |
10 |
2,895 |
11 |
|
|
50,000 – 60,000 |
225 |
7 |
2,814 |
11 |
|
|
60,000 – 70,000 |
146 |
4 |
2,338 |
9 |
|
|
70,000 – 80,000 |
112 |
3 |
2,204 |
8 |
|
|
80,000 – 90,000 |
58 |
2 |
1,372 |
5 |
|
|
90,000 – 100,000 |
35 |
1 |
965 |
4 |
|
|
100,000 – 150,000 |
87 |
3 |
3,217 |
12 |
|
|
150,000+ |
51 |
2 |
4,569 |
17 |
|
|
All |
3,261 |
100 |
26,373 |
100 |
|
This table includes tax on New Zealand Superannuation and major Social Welfare benefits, but excludes ACC levies and anyone who is under 15.
Data are projected for the year ended March 2009 and include the changes to tax rates and thresholds on 1 October 2008.
|
By how much will my after-tax income increase? |
|||||
|
Current annual taxable income ($) |
Weekly after-tax income increase above current ($) |
Annual |
|||
|
from 1 Oct 2008 |
from 1 April 2010 |
from 1 April 2011 |
|||
|
20,000 |
12 |
18 |
22 |
1,130 |
|
|
30,000 |
12 |
18 |
22 |
1,130 |
|
|
40,000 |
16 |
22 |
26 |
1,370 |
|
|
50,000 |
16 |
22 |
32 |
1,670 |
|
|
60,000 |
16 |
22 |
32 |
1,670 |
|
|
70,000 |
28 |
34 |
44 |
2,270 |
|
|
80,000 and above |
28 |
39 |
55 |
2,870 |
|
The after-tax incomes calculated in this table exclude the ACC levy.
|
Working for Families Tax Credits increase from 1 October 2008 (dollars per week) |
|||||
|
Annual family taxable income ($) |
Number of children under 13 |
||||
|
One |
Two |
Three |
Four |
||
|
… |
… |
… |
… |
… |
|
|
30,000 |
4 |
7 |
10 |
13 |
|
|
40,000 |
11 |
14 |
17 |
20 |
|
|
50,000 |
11 |
14 |
17 |
20 |
|
|
60,000 |
11 |
14 |
17 |
20 |
|
|
70,000 |
11 |
14 |
17 |
20 |
|
|
80,000 |
0 |
14 |
17 |
20 |
|
|
90,000 |
0 |
2 |
17 |
20 |
|
|
100,000 |
0 |
0 |
17 |
20 |
|
|
110,000 |
0 |
0 |
0 |
20 |
|
|
120,000 |
0 |
0 |
0 |
20 |
|
|
Cut-off points |
74,862 |
90,457 |
106,052 |
125,547 |
|
Working for Families Tax Credits are in two parts, Family Tax Credit (FTC) and In-Work Tax Credit (IWTC). This assumes family income type is salary and wage, the family works the required hours to receive IWTC, and all children are under 13. Children over 13 may result in higher credits. The entitlements are weekly, rounded to the nearest dollar. Includes estimated benefits and other non-wage income for year ended March 2009.
|
How do tax scale changes affect tax revenue? |
|
|
By increasing thresholds by $1,000: |
($m) |
|
45 |
|
130 |
|
25 |
|
By decreasing tax rates by 1%: |
($m) |
|
165 |
|
140 |
|
405 |
|
225 |
|
225 |
|
820 |
Estimated decrease in tax revenue for the year ended March 2009 for tax thresholds and rates as they stand at Budget day. This allows for interaction between tax types, but makes no allowance for feedback effects from the economy.
|
What is the full-year cost of New Zealand Super, other benefits and Government Debt |
||
|
What is the full-year cost of ? |
($m) |
|
|
$1 a week increase (in the hand) to NZ Super |
27 |
|
|
$1 a week increase (in the hand) to other benefits |
14 |
|
|
$1 billion increase in government debt |
67 |
|
|
Average incomes |
|
|
Average individual wage earnings: |
($) |
|
Full-time earner |
47,637 |
Full-time earner works for more than 30 hours per week.
|
Average family gross income |
|
|
Average family gross income: |
($) |
|
Couple with children |
96,322 |
|
Couple with no children |
77,268 |
|
Sole parent |
32,403 |
|
Single person |
29,632 |
Includes estimated benefits and other non-wage income for year ended March 2009.
|
The new personal income tax scale |
||||
|
|
Tax rates and thresholds |
|||
|
Current |
15% |
21% |
33% |
39% |
|
up to |
$9,500 |
$38,000 |
$60,000 |
above $60,000 |
|
New |
12.5% |
21% |
33% |
39% |
|
from 1 October 2008 |
$14,000 |
$40,000 |
$70,000 |
above $70,000 |
|
from 1 April 2010 |
$17,500 |
$40,000 |
$75,000 |
above $75,000 |
|
from 1 April 2011 |
$20,000 |
$42,500 |
$80,000 |
above $80,000 |
For example from 1 April 2011, an individual earning $40,000 pa pays 12.5% tax on the first $20,000 of income and 21% tax on the remaining $20,000.
|
Who pays income tax and how much? |
|||||
|
Annual individual taxable income ($) |
Number of people |
Tax paid |
|
||
|
(000) |
% |
($m) |
% |
|
|
|
Zero |
239 |
7 |
0 |
0 |
|
|
1 – 10,000 |
442 |
14 |
248 |
1 |
|
|
10,000 – 20,000 |
841 |
26 |
1,968 |
8 |
|
|
20,000 – 30,000 |
372 |
11 |
1,592 |
6 |
|
|
30,000 – 40,000 |
339 |
10 |
2,191 |
8 |
|
|
40,000 – 50,000 |
314 |
10 |
2,895 |
11 |
|
|
50,000 – 60,000 |
225 |
7 |
2,814 |
11 |
|
|
60,000 – 70,000 |
146 |
4 |
2,338 |
9 |
|
|
70,000 – 80,000 |
112 |
3 |
2,204 |
8 |
|
|
80,000 – 90,000 |
58 |
2 |
1,372 |
5 |
|
|
90,000 – 100,000 |
35 |
1 |
965 |
4 |
|
|
100,000 – 150,000 |
87 |
3 |
3,217 |
12 |
|
|
150,000+ |
51 |
2 |
4,569 |
17 |
|
|
All |
3,261 |
100 |
26,373 |
100 |
|
This table includes tax on New Zealand Superannuation and major Social Welfare benefits, but excludes ACC levies and anyone who is under 15.
Data are projected for the year ended March 2009 and include the changes to tax rates and thresholds on 1 October 2008.
|
By how much will my after-tax income increase? |
|||||
|
Current annual taxable income ($) |
Weekly after-tax income increase above current ($) |
Annual |
|
||
|
from 1 Oct 2008 |
from 1 April 2010 |
from 1 April 2011 |
|
||
|
20,000 |
12 |
18 |
22 |
1,130 |
|
|
30,000 |
12 |
18 |
22 |
1,130 |
|
|
40,000 |
16 |
22 |
26 |
1,370 |
|
|
50,000 |
16 |
22 |
32 |
1,670 |
|
|
60,000 |
16 |
22 |
32 |
1,670 |
|
|
70,000 |
28 |
34 |
44 |
2,270 |
|
|
80,000 and above |
28 |
39 |
55 |
2,870 |
|
The after-tax incomes calculated in this table exclude the ACC levy.
|
Working for Families Tax Credits increase from 1 October 2008 (dollars per week) |
|||||
|
Annual family taxable income ($) |
Number of children under 13 |
|
|||
|
One |
Two |
Three |
Four |
|
|
|
… |
… |
… |
… |
… |
|
|
30,000 |
4 |
7 |
10 |
13 |
|
|
40,000 |
11 |
14 |
17 |
20 |
|
|
50,000 |
11 |
14 |
17 |
20 |
|
|
60,000 |
11 |
14 |
17 |
20 |
|
|
70,000 |
11 |
14 |
17 |
20 |
|
|
80,000 |
0 |
14 |
17 |
20 |
|
|
90,000 |
0 |
2 |
17 |
20 |
|
|
100,000 |
0 |
0 |
17 |
20 |
|
|
110,000 |
0 |
0 |
0 |
20 |
|
|
120,000 |
0 |
0 |
0 |
20 |
|
|
Cut-off points |
74,862 |
90,457 |
106,052 |
125,547 |
|
Working for Families Tax Credits are in two parts, Family Tax Credit (FTC) and In-Work Tax Credit (IWTC). This assumes family income type is salary and wage, the family works the required hours to receive IWTC, and all children are under 13. Children over 13 may result in higher credits. The entitlements are weekly, rounded to the nearest dollar. Includes estimated benefits and other non-wage income for year ended March 2009.
|
How do tax scale changes affect tax revenue? |
|
|
By increasing thresholds by $1,000: |
($m) |
|
45 |
|
130 |
|
25 |
|
By decreasing tax rates by 1%: |
($m) |
|
165 |
|
140 |
|
405 |
|
225 |
|
225 |
|
820 |
Estimated decrease in tax revenue for the year ended March 2009 for tax thresholds and rates as they stand at Budget day. This allows for interaction between tax types, but makes no allowance for feedback effects from the economy.
|
What is the full-year cost of New Zealand Super, other benefits and Government Debt |
|
|
What is the full-year cost of ? |
($m) |
|
$1 a week increase (in the hand) to NZ Super |
27 |
|
$1 a week increase (in the hand) to other benefits |
14 |
|
$1 billion increase in government debt |
67 |
|
Average incomes |
|
|
Average individual wage earnings: |
($) |
|
Full-time earner |
47,637 |
Full-time earner works for more than 30 hours per week.
|
Average family gross income |
|
|
Average family gross income: |
($) |
|
Couple with children |
96,322 |
|
Couple with no children |
77,268 |
|
Sole parent |
32,403 |
|
Single person |
29,632 |
Includes estimated benefits and other non-wage income for year ended March 2009.
