From 1 April 2021, individuals earning over $180,000 in an income year will have to pay 39% instead of the 33% tax rate. If you are earning more than $180,000, especially from providing your own labour, you may wish to review your existing structure and tax affairs to ensure it’s meeting your financial and non-financial goals in the long run.
The new top rate applies to individuals (including bonus payments, back pays and redundancies) on amounts over $180,000 in an income year, and the PAYE, resident withholding tax and other withholding tax rules are being updated to reflect this. It will only apply when total income is more than $180,000 so there is no change for those earning less than that.
The change in tax rate is expected to affect the top 2% earnings of the New Zealand population. A few other employment-related tax rates have also been modified in conjunction with the new tax rate:
Accordingly, you might want to consider:
NZ International Tax & Property Advisors is a Chartered Accountant firm providing accounting, tax, property consulting and training services to locals, migrants and businesses. Our professional team has over ten years of experience in Big Four, Mid Tier and boutique cross border tax Chartered Accountant firms specialising in cross border tax for migrants and expats, taxation on land transactions, IRD disputes and resolutions and small and medium business tax.
We can explain what this change might mean to you or your employees and assist with tax planning before 31 March 2021.
We offer a no-obligation 30min free consultation for new clients to discuss your situation and how we can add value and assist you in your case. Follow the link to book a time: https://www.nztaxprop.co.nz/book-online
For more information, visit our website at https://www.nztaxprop.co.nz/.