NZ Tax and Deductions Review
Presentation
•
Mathematics, Life Skills
•
8th - 12th Grade
•
Practice Problem
•
Medium
Olive Jellyman
Used 3+ times
FREE Resource
13 Slides • 18 Questions
1
Review:
NZ Tax and Deductions
US24695
2
Section 1
Tax Types and How Tax Affects your Income
3
4
Multiple Choice
What are the main tax types in New Zealand?
PAYE, RWT and Self-employed
PAYE, RWT, Provisional and Terminal Tax
PAYE, GST, RWT and VAT
Pay as you Earn, Resident Withholding Tax, Provisional Tax and Terminal Tax
5
Tax Types
There are four types of tax that we pay in New Zealand:
PAYE (Pay as you Earn) - a tax on your income as you earn it
RWT (Resident Withholding Tax) - a tax on savings and investments
Provisional Tax - a tax for self-employed people based on the amount of tax they paid last year and paid in 3 instalments throughout the year
Terminal Tax - any tax that is left to pay at the end of the financial year for self-employed people after they have paid their provisional tax
6
Multiple Choice
Which of the four tax types are you going to pay if you earn a salary or wage?
PAYE
RWT
Provisional Tax
Terminal Tax
7
Multiple Select
Which tax(es) will you pay if you are a self-employed tutor earning over $20,000 per year?
PAYE
RWT
Provisional Tax
Terminal Tax
8
Multiple Choice
Which tax will you pay if you own shares in the NZ Stock Exchange?
PAYE
RWT
Provisional Tax
Terminal Tax
9
How Income is Taxed
Either someone else takes tax out of your income on your behalf or you pay the tax yourself.
If someone else takes tax out of your income they pass the tax on to the IRD on your behalf. You are paid the after-tax amount.
If you pay tax yourself, you work out how much you need to pay at the end of the tax year (31 March) and pay the tax directly to the IRD.
10
My Income is Taxed Before I Get Paid
Some types of income have tax deducted before you get paid:
- salary and wages (PAYE)
- Work and Income benefits (PAYE)
- ACC compensation (PAYE)
- student allowances (PAYE)
- New Zealand Superannuation (PAYE)
- interest from savings accounts and investments (RWT)
- Portfolio investment entity (PIE) income (RWT)
- dividends from shares (RWT)
Your employer, payer or bank deducts the tax before they pay you. The tax rate they use depends on your income and the information you give them.
11
Multiple Choice
If your small business is only a side hobby that earns you $200 per month in cash, do you have to pay tax?
If you answer yes, what tax would you pay on this income?
Yes, PAYE
Yes, RWT
Yes, Provisional Tax
Yes, Terminal Tax
No, I don't have to pay any tax
12
My Income is Not Taxed Before I Get Paid
Commonly this includes income from:
- self-employment
- rental property including Airbnb and Bookabach
- 'under the table' cash jobs
- tips from customers
- royalties
- a taxable property sale (not your first home)
Tax still needs to be paid on this income and it will come under RWT or Provisional Tax and/or Terminal Tax.
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Open Ended
You are earning a salary or wage (getting paid either weekly or fortnightly) in your job.
1. What tax do you pay?
2. How does the tax affect your income? (What happens to your income?)
14
Open Ended
You have a savings account set up at your bank and are earning interest.
1. What tax will you pay on this interest income?
2. How does this affect the payment you get?
15
Open Ended
You are self-employed and working as a small business selling homemade cards.
1. What tax or taxes will you pay?
2. How does this affect how much you earn?
16
Poll
How confident are you with Tax Types and How the Tax is taken from your income?
Confident - ask me any question and I could find the answer
Semi-confident - ask me a question and I think I could find the answer with a little bit of time
Still very iffy - I would struggle to know where to look for the answer to your question and it would take a long time
I couldn't answer your question no matter what information I had access to
17
Section 2
Other Deductions
18
Multiple Select
What other deductions can be taken from your income? (Select all that apply)
Voluntary Donations
Union Membership Fees
Enforced Deductions such as Child Support and Court Orders
Student Loan Repayments
KiwiSaver
19
Other Deductions
Student loan repayments - once you start working, you must start paying back your student loan (if you have one). This is deducted from your pay at a rate of 12% before you receive your pay.
Union Fees - if you join a union, the fees can be deducted from your pay before you get it.
Voluntary Donations - you can choose to donate money from your pay to a registered charity before it gets taxed.
KiwiSaver - you choose the rate (3%, 4%, 6%, 8%, or 10%) and it is deducted from your pay before you get the balance.
Enforced deductions - the courts can order you to pay child support or court orders that will be deducted from your pay.
20
Poll
How confident are you in describing other deductions from your pay and how they would be paid?
Confident - I could tell you quite quickly (even if I had to look it up)
Semi-confident - I'd have to look it up again, but I could do it
Iffy - I'd have to look it up but then I'd have to repeat it word for word
Struggling - I'm not sure where to look or how to figure out what you're asking
21
Section 3
Tax Codes
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23
24
Multiple Choice
You are a 35-year-old New Zealand citizen. You have a single job and don't receive anything extra (e.g. benefit or tax credits). Your income is $56 000 per year and you have a small student loan.
What is your tax code?
M SL
M
25
Multiple Choice
You are a 25-year-old NZ citizen desperately saving up for your first home. You have two jobs: the first in accounting, and the second in childcare. You have a large student loan, but are earning $71 000 per annum in total.
What is your tax code for the second job?
S SL
ST SL
SB SL
SH SL
26
Multiple Choice
A group of overseas farm workers has come to you asking for help. They have been employed in New Zealand for the first time for 3 months to complete some shearing work.
They don't know what tax code to choose. Can you help them out?
CAE
NSW
M
27
Poll
Rate your confidence level in reading a scenario and selecting the correct tax code.
5 - Confident
4
3 - I can look it up and get it right half the time
2
1 - I would struggle to figure out how to look it up using the IR330.
28
Overall
29
Poll
How confident are you with this topic as a whole?
Very confident
Getting there
Still kinda iffy
I know absolutely nothing
30
Poll
What did you think of this topic?
Interesting
Useful
Just ok
Boring
I have no clue what just happened
31
Open Ended
What would you like to see in future topics that would help you learn more effectively?
Review:
NZ Tax and Deductions
US24695
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