Know the importance of PAYE in New Zealand
Tax is an inescapable fact of life in New Zealand. PAYE represents ‘Pay as you Earn’. Paye in New Zealand is the basic income tax system in New Zealand. This tax is not to be worried about as your employer here handles this part of your taxes before giving you your wages.
PAYE is a combination of ACC earner’s levy and the income tax. The ACC earner’s levy is charged or paid as a compulsory contribution for an employee to cover non-work injuries cost. The Inland Revenue Department is in charge of collecting these for an ACC (Accident Compensation Corporation).
How much goes towards PAYE?
New Zealand people receiving wages or salary are expected to pay ACC earner’s levy and income tax as a part of their PAYE. Employers use the PAYE tables that are provided to figure out the PAYE to be deducted fortnightly or weekly.
Generally, there are tax codes and it decides on how much deduction should be done for income tax as PAYE. The highest primary income earning source will be on a tax code. It is a must to provide your employers your tax code as you begin employment and this must be done by completing a declaration of Tax Code known as IR330. In case you wish to change the tax code, you may complete a declaration of new tax code while you change details. If you fail to do so, incorrect PAYE will get deducted. The IR330s copies will be kept by your employer for a period of seven years, in case there is some tax code query.