Paying tax

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What is income tax?

Income tax is money taken out of your earnings. Unless you're self-employed (external link) , your employer takes out the income tax before you get paid. The main types of income tax are:

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Why do you pay income tax?

Inland Revenue collects taxes on behalf of the government.

Everyone who earns money in New Zealand must pay their share of tax. The government uses taxpayers' money to pay for services we all need - such as healthcare, education and environmental protection and recreation.

Here's how the government spent our taxes in 2009-10


A graph showing how the government spent our taxes in 2009-10.

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If people don't pay their fair share, everyone misses out.

When and how do you pay income tax?

If you earn salary, wages or schedular payments (formerly withholding payments), your tax will be taken out of your pay during the income year by your employer.

For most people the income year starts on 1 April and finishes on 31 March the following year.

So the 2015 income year relates to income from 1 April 2014 to 31 March 2015.

If at the end of the income year you haven't paid enough income tax, you'll have to pay it directly to Inland Revenue by 7 February of the following year.

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How much income tax do you pay?

What if you don't pay the right amount of income tax?

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