Understanding New Zealand Tax: IRD Numbers, PAYE & Filing for Migrants (2026)

Understanding the New Zealand tax system is one of the most important administrative tasks you'll face after arriving in the country. Whether you're starting a new job, running a business, or earning investment income, knowing how the tax system works will help you stay compliant and avoid surprises.

The good news is that New Zealand's tax system is relatively straightforward compared to many other countries. Most employees have their tax automatically deducted through PAYE (Pay As You Earn), and filing annual tax returns is often optional for standard wage earners. However, there are still important steps you need to take and concepts you should understand.

In this comprehensive guide, we'll walk you through everything migrants need to know about New Zealand tax in 2026, from getting your IRD number to understanding tax rates and filing requirements.

What is the IRD and Why Do You Need an IRD Number?

The Inland Revenue Department (IRD) is New Zealand's tax authority, similar to the IRS in the United States or HMRC in the UK. Your IRD number is your unique tax identification number in New Zealand, and you'll need it for almost every financial transaction.

You need an IRD number to legally work in New Zealand, open a bank account, earn interest on savings, invest in KiwiSaver (New Zealand's retirement savings scheme), and receive government payments. Most importantly, your employer cannot pay you without an IRD number, as they're legally required to deduct tax from your wages.

When you open a bank account in New Zealand, the bank will ask for your IRD number. Without it, they'll deduct tax from your interest at the highest non-declaration rate, which means you'll pay more tax than necessary. This is one of the first administrative tasks you should complete after arrival.

How to Apply for an IRD Number

Applying for an IRD number is straightforward and free. You can apply online through the IRD website, by phone, or at an IRD office. Most migrants apply online as it's the fastest method.

To apply, you'll need your passport, proof of your New Zealand address, and evidence that you're in New Zealand legally (such as your visa). If you don't have a permanent address yet, you can use temporary accommodation details, but you'll need to update your address once you're settled.

Processing typically takes 10-15 business days, though it can be faster. Your IRD number will be sent to your New Zealand address. Keep this number safe and memorize it if possible, as you'll use it frequently.

Understanding Tax Residency in New Zealand

Your tax obligations in New Zealand depend on whether you're considered a tax resident. This is different from your immigration status. You can be on a temporary work visa but still be a tax resident for income tax purposes.

Generally, you become a tax resident if you're in New Zealand for more than 183 days in any 12-month period, or if you have a permanent place of abode in New Zealand. Tax residents are taxed on their worldwide income, while non-residents are only taxed on New Zealand-sourced income.

Most migrants who move to New Zealand permanently will be tax residents. This means you'll need to declare income from overseas sources, though you may be able to claim foreign tax credits if you've already paid tax in another country. Double taxation agreements exist between New Zealand and many countries to prevent paying tax twice on the same income.

New Zealand Tax Rates for 2026

New Zealand uses a progressive tax system with multiple income tax brackets. As of 2026, the tax rates are structured as follows:

• $0 - $14,000: 10.5%
• $14,001 - $48,000: 17.5%
• $48,001 - $70,000: 30%
• $70,001 - $180,000: 33%
• Over $180,000: 39%

These rates apply to your taxable income after any deductions. It's important to understand that these are marginal tax rates, meaning you only pay the higher rate on income above each threshold, not on your entire income. For example, if you earn $50,000, you pay 10.5% on the first $14,000, 17.5% on the amount between $14,001 and $48,000, and 30% only on the $2,000 above $48,000.

When finding work in New Zealand, it's helpful to understand these tax brackets so you can accurately calculate your take-home pay. Many job advertisements list salaries before tax, so knowing what percentage you'll pay helps you budget effectively.

What is PAYE and How Does it Work?

PAYE (Pay As You Earn) is the system used to deduct income tax directly from your wages or salary before you receive your pay. If you're an employee, your employer will automatically calculate and deduct the correct amount of tax based on your tax code, then send it to the IRD on your behalf.

This means most employees never need to worry about making tax payments themselves. The system is designed to deduct roughly the correct amount of tax throughout the year, so you shouldn't face a large tax bill at the end of the year. However, if your circumstances change or your tax code is incorrect, you may pay too much or too little tax.

Understanding Tax Codes

Your tax code tells your employer how much tax to deduct from your pay. The most common tax code for migrants is "M", which applies the standard tax rates we listed earlier. When you settle into your first few months in New Zealand, one of your key administrative tasks is ensuring you have the correct tax code.

Other common tax codes include "SL" if you have a student loan, "S" for secondary income from a second job, and special codes for different situations. Using the wrong tax code can mean paying too much or too little tax.

You can check and update your tax code through your myIR account (the IRD's online portal) or by contacting the IRD directly. If you're unsure which code applies to you, the IRD can help you determine the correct one.

ACC Levies: The Extra Deduction You'll See

In addition to income tax, you'll notice another deduction on your payslip: the ACC earners' levy. ACC (Accident Compensation Corporation) is New Zealand's no-fault accident insurance scheme that covers all residents and visitors for personal injuries.

The ACC levy is a small percentage of your gross earnings (typically around 1.5-2% as of 2026) and is deducted automatically through PAYE. This levy funds your coverage under the ACC scheme, which means if you're injured in an accident (whether at work, home, or play), ACC may cover your medical costs and provide income support while you recover.

This system is one of the unique aspects of New Zealand's social safety net. Unlike many countries where workplace injuries are covered by employer insurance and other injuries aren't, ACC covers everyone for all types of accidents. You can learn more about how ACC works in our guide to understanding New Zealand's healthcare system.

Do You Need to File a Tax Return?

One of the most common questions migrants ask is whether they need to file an annual tax return. The answer depends on your circumstances.

If you're a standard employee with only PAYE income from one or two jobs, you generally don't need to file a tax return. The IRD will automatically calculate whether you've paid the right amount of tax and issue a refund or send a bill if needed. This is called an automatic income tax assessment.

However, you must file a tax return if you're self-employed, earn income from rental properties, have significant investment income, claim expenses against your income, or have income from overseas. If you're unsure whether you need to file, check with the IRD or consult a tax advisor.

The Tax Year in New Zealand

New Zealand's tax year runs from April 1 to March 31. This is different from the calendar year used in many countries. Your first tax year in New Zealand might only be a partial year if you arrive mid-year.

If you do need to file a return, the deadline is July 7 following the end of the tax year (or March 31 of the following year if you have a tax agent). For example, for the 2025-2026 tax year (April 1, 2025 - March 31, 2026), the filing deadline would be July 7, 2026, or March 31, 2027 with an extension.

Using myIR: Your Online Tax Account

myIR is the IRD's online portal where you can manage all your tax affairs. Once you have your IRD number, you should register for a myIR account as soon as possible. This secure platform allows you to view your income information, check your tax code, update your details, file returns, and communicate with the IRD.

Through myIR, you can also view your KiwiSaver balance, check if you're due a tax refund, and update your bank account details for refunds. It's far more convenient than calling or visiting an IRD office, and you can access it 24/7.

The IRD has invested heavily in making myIR user-friendly, and most common tasks can be completed online without needing to speak to anyone. If you do need help, the IRD has a helpline and webchat service available.

KiwiSaver: New Zealand's Retirement Savings Scheme

While not strictly a tax, KiwiSaver is closely linked to the tax system and is worth understanding. KiwiSaver is a voluntary retirement savings scheme where you contribute a percentage of your salary, your employer contributes, and the government may also contribute.

As a new migrant, you're not automatically enrolled in KiwiSaver, but you can choose to join. If you do join, you'll contribute 3%, 4%, 6%, 8%, or 10% of your gross salary (you choose the rate), and your employer must contribute at least 3%. The government may also contribute up to $521.43 per year if you meet certain criteria.

KiwiSaver contributions are deducted through PAYE, so they appear on your payslip alongside your tax deductions. These contributions are invested in your chosen KiwiSaver fund and locked away until you reach retirement age (currently 65), buy your first home, or move overseas permanently.

GST: The Consumption Tax You'll Pay Daily

Beyond income tax, you'll encounter GST (Goods and Services Tax) in your daily life in New Zealand. GST is a 15% consumption tax applied to most goods and services. Unlike sales tax in some countries, GST is almost always included in the displayed price, so what you see is what you pay.

For example, if an item is priced at $100 in a shop, that's the final price you'll pay. The $100 already includes $13.04 of GST. This makes shopping much simpler as there are no surprise additions at the checkout.

Some items are GST-free (zero-rated), including most financial services, residential rent, and donated goods sold by non-profit organizations. Understanding GST helps you accurately plan your cost of living in New Zealand, as it's effectively a 15% addition to most things you buy.

Tax Considerations for Self-Employed Migrants

If you're self-employed or run your own business in New Zealand, your tax obligations are more complex than for employees. You'll need to calculate and pay your own tax through provisional tax payments throughout the year, rather than having it automatically deducted.

Self-employed individuals must file annual income tax returns and may need to register for GST if their annual turnover exceeds $60,000. You'll also pay ACC levies based on your business type and estimated earnings.

The advantage of being self-employed is that you can claim business expenses against your income, potentially reducing your taxable income. However, the IRD has strict rules about what qualifies as a business expense, and you must keep detailed records.

Many self-employed migrants work with an accountant to ensure they meet all their obligations and optimize their tax position legally. The cost of an accountant is itself a tax-deductible business expense.

Common Tax Mistakes Migrants Make

Understanding common pitfalls can help you avoid problems with the IRD. One frequent mistake is working without an IRD number. Some migrants start work immediately after arrival and use a temporary tax rate while waiting for their IRD number. This temporary rate is often higher than necessary, and sorting out the refund later can be complicated.

Another common error is using the wrong tax code, particularly if you have multiple jobs or income sources. Each income source should use the appropriate tax code, or you'll pay incorrect amounts of tax.

Migrants sometimes forget to declare overseas income, assuming that because it's earned overseas, it's not taxable in New Zealand. If you're a tax resident, your worldwide income is generally taxable here, though you may receive credits for foreign tax paid.

Finally, some migrants don't update their address details with the IRD after moving. This can cause you to miss important correspondence about tax refunds, bills, or assessments.

Getting Help with Tax Questions

The IRD offers extensive support for taxpayers, including migrants. Their website has detailed guides in multiple languages, and their helpline can answer most questions. The IRD also runs free seminars and webinars on tax topics.

For complex situations, it's worth consulting a tax advisor or accountant. This is particularly important if you're self-employed, have income from multiple sources, have overseas assets or income, or are in the process of becoming or ceasing to be a tax resident.

Many migrants find it helpful to consult a tax professional for their first year in New Zealand to ensure everything is set up correctly, then manage things themselves in subsequent years once they understand the system.

Tax Planning as Part of Your Migration Budget

When budgeting and saving for your move to New Zealand, it's important to factor in the tax you'll pay on your New Zealand income. Your take-home pay will be approximately 70-85% of your gross salary, depending on your income level and any additional deductions like KiwiSaver.

If you're moving mid-year, you may have a more complex tax situation for that first year, potentially owing tax in both countries. Planning for this and possibly setting aside funds to cover any unexpected tax bills is prudent.

Understanding the tax system also helps you make informed decisions about employment offers. A salary of $80,000 sounds very different when you understand you'll take home approximately $58,000 after tax and ACC levies, and possibly less if you're contributing to KiwiSaver.

Key Takeaways

New Zealand's tax system is relatively straightforward for most migrants. Get your IRD number as soon as possible after arrival, as you'll need it for employment and banking. Understand that most employees have tax automatically deducted through PAYE and don't need to file annual returns unless they have additional income sources.

Keep your contact details up to date with the IRD, register for myIR to manage your tax affairs online, and don't hesitate to contact the IRD if you have questions. They're there to help you understand your obligations and get things right.

Remember that while the New Zealand tax system is generally efficient and fair, your specific situation may have unique considerations. When in doubt, seek professional advice rather than guessing. Getting your tax obligations right from the start will save you stress and potential penalties down the line, allowing you to focus on enjoying your new life in New Zealand.