Although you have to pay tax when working in New Zealand as part of the pay-as-you-earn tax system, you can get some money back through a tax return. The New Zealand tax year is between April 1st and March 31st the following year. Once the tax year is over, you can apply for a tax refund for anytime you worked during the tax year. You can also request a tax refund when leaving New Zealand if you are leaving half way through the year.
There are two ways of getting a tax refund:
The amount of money you get depends on the amount you earned during that tax year, how long you worked for, the type of work you did, and how much tax was taken from your wages. Have a look on this free tax calculator below to see how much you could get.
For ease, a free tax refund estimation, and a refund put straight into your bank account, choose a professional to sort out the tax refund for you. How do they work? You often just need to spend about 15 minutes of your time filling out an online form then you just sit back and wait for the tax refund to go into your bank account. The tax refund company will take a service fee from the tax refund, so you don't need to pay any money upfront. What's more, the service fee is often very reasonable.
There are tons of companies that specialise in a tax refund service in New Zealand. The one we prefer is taxback.com.
Whether you are about to arrive in New Zealand, are in the middle of your gap year, or you left New Zealand a few years ago, taxback.com can get the maximum tax refund available back to you. Where other tax return companies give you an average of NZ$300 back after the service fee, the average tax refund for taxback.com is NZ$550. Additionally, they can contact you over the phone in any country in your own language to talk you through the process of the tax refund every step of the way. In fact, you can even request a callback now, just to make sure you save all the documents you need throughout your New Zealand working holiday. They will also enter your details into their database and call you back before you are scheduled to leave New Zealand to go over the process with you.
It's easy: ask for a free callback when filling up the form above!
Most tax return companies or doing your own tax return only allows tax return payments into a New Zealand bank account, which is a pain if you are leaving the country and need to close your account! This is another reason why we work with taxback.com: They can make the payment into any bank account, even overseas for a fraction of teh cost of cashing an overseas cheque.
Expect a payment to take up to 10 weeks to show up in your bank account, especially if you arrived in New Zealand part-way through the tax year.
If you plan on taking on the task alone and save on the service fee, then you will need to work with New Zealand's Inland Revenue Department (IRD). Prepare to apply for the tax refund about three months before you leave New Zealand, as they will pay the refund into a New Zealand bank account or send it by the less secure method of posting a cheque overseas. Plus, it makes it easier to contact IRD if you are in New Zealand. Once the application has been processed, you can usually expect to way 2-3 months for the tax return payment.
For your own New Zealand tax return you will need: your end of year payslip or all your payslips from that tax year, then you will need to complete the appropriate forms. There are three different forms depending on three different scenarios: if you are about to leave New Zealand, if you are staying a further three months from the date you apply, or if you are leaving New Zealand part-way through the tax year. You can find each form on the IRD website.
So after the tax year is over, apply for the tax refund. You have nothing to lose and a boost in your bank to gain!