(NZ Migrant tax tips – 5 minute read)
Kia ora! Haere mai ki Aotearoa!
If you’re reading this, chances are that you’re thinking of moving to Aotearoa New Zealand. Welcome! Haere Mai! NZ is a great place to live. We also enjoy a pretty high standard of living over here as well. That high standard of living is, unsurprisingly, supported by the relatively high amount of taxes that we pay over here.
So if you’re looking to move to Aotearoa, or have already made the decision to move here, let’s look at some tax tips for you:
NZ Migrant tax tips #1: Personal income tax is progressive
Progressive not in the ‘free healthcare for everyone’ sense (although we have that too). But progressive in the sense that your income tax rate increases based on how much income you are making. That way, low income earners don’t pay tax as high as high income earners.
All individual tax is calculated using these progressive tax brackets. As of 1 April 2025, this is what they look like:
Every individual pays taxes at the same rate. Let’s use an example. If you make $50,000 NZD a year you will pay 10.5% of taxes on the first $15,600 ($1,638) and the remaining $34,400 gets taxed at 17.5% 9($6,020). This means that your effective (average) tax rate is 7,658/50,000 X 100 = 15.3%. So you’re not getting taxed at your highest bracket. Even if you are making more than $180,000 a year, you won’t be paying an average tax of 39%.
You get taxed differently at each level of income that you make during the year.
Almost all income flows through to your personal name
In Aotearoa, we don’t have a lot of different tax types for the individual. So almost all income adds to your personal income. The only exception is PIE Income (income from investment portfolios in NZ) which gets taxed separately. Everything else adds to your personal income. This includes:
- Dividend income
- Overseas income
- Rental income
- Self employment income
- Salary income
- Income on sales of properties (in certain circumstances)
- Shareholder salaries (only if you have an NZ company)
- Income protection insurance payouts
Etc. Etc.
Part of the NZ IRD (Inland Revenue Department)’s tax philosophy is that tax should be simple. Hence why everything flows through to your personal name.
You don’t get a lot of deductions
Another thing to note about Aotearoa taxes for individuals is that you don’t get a lot of deductions. Some tax jurisdictions around the world are quite generous in terms of deductions. You can claim deductions on education, your children and pension savings. That’s not the case in Aotearoa. The average salary-earning kiwi can only claim yearly deductions on the following items:
- Accountant fees
- Income protection insurance
- Commissions paid on income from interest and dividends
- Interest on money you’ve borrowed for investments (different rules apply for residential rental investments!)
- Interest paid to IRD for late payment of tax
That’s it. Nothing else. Zip. Nada. Kore (zero in Māori).
NZ Migrant tax tips #2: GST is everywhere!
GST stands for ‘Goods and Service Taxes’. Functionally, it is a tax on the consumer. Almost any service or product that you purchase in NZ has GST on it. All GST registered businesses in Aotearoa (all businesses earning more than $60,000 a year in sales MUST be GST registered) will charge GST on their goods and services
All goods and services have 15% GST inclusive in their price. This means that all prices increase by 15%. A $1,000 laptop will cost you $1,150, with $150 being the GST portion of the price. Of course most businesses don’t advertise the amount of tax you pay. But its all included in the list price!
Love reading up on taxes? Learn more about GST in NZ here!
Being GST registered as an individual/business
Every tax paying entity in Aotearoa can register for GST. That includes individuals. To do that you must be supplying a GST taxable activity. Basically you must be self-employed and/or running a business.
Registering for GST means that you have to file GST returns. You need to collect GST from your clients, but you can claim back GST on items your purchase for your business/self-employment. I wouldn’t recommend being GST registered just to claim GST back on some purchases. The admin headache of GST filing is almost never worth it.
You can read more about being GST registered here (if you’re thinking about setting up a business)
Bringing in products for sale in NZ
Note that if you’re bringing in goods or importing goods into NZ for sale in NZ, you may get charged GSTs on import duties. The amount of GST you have to pay depends on the value (converted into NZD) for the item.
You won’t get charged GST for personal items though – so don’t worry about it!
NZ Migrant tax tips #3: Tax residency/non-residency in NZ
Tax residency in NZ is easy to work out. If you’ve been living in the country for more than 183 days over a 12 month period -You’re a tax resident.
The key difference between a tax/non-tax resident is that non-tax residents DO NOT have to declare and pay NZ tax on their foreign income. A tax resident MUST declare any overseas income they have to the NZ IRD. There is a 48 month exemption from the day you become a tax resident where you don’t have to declare overseas income. After that, you have to declare your overseas income to the NZ IRD.
The good news is that NZ IRD likely has a double-taxation agreement (DTA) with the country (I’m assuming your home country) your foreign income is coming from. This means that any tax that you’ve paid on that foreign income can be used as tax credits to offset your NZ taxes.
NZ Migrant tax tips #4: Work out your NZ tax codes
If you’re coming here as a migrant, chances are that you’ll be looking for a full-time salaried job. It’s important to choose the right tax code for yourself as it determines how much tax gets deducted for your salary.
You can read all about NZ tax codes over here.
Haere mai ki Aotearoa e hoa!
Welcome to NZ my friend! We hope that you have a great time here. I also wish you wealth and prosperity in this beautiful country. Tax can seem like a burden sometimes, but because it is mostly easy to understand, you don’t (usually) get any rude surprises tax-wise.
If you’re in employment, taxes are easy. If you’re planning on starting a business here, well, you may want to talk to an accountant!
Stay positive!