Key Facts for Taxpayers (Part 1)
Who pays income tax... and how much?
|Number of people||Tax paid|
|Annual individual taxable income ($)||0||%||($m)||%|
|1 - 10,000||448||14||257||1|
|10,000 - 20,000||819||25||1,675||7|
|20,000 - 30,000||407||12||1,624||7|
|30,000 - 40,000||375||11||2,290||10|
|40,000 - 50,000||316||10||2,612||11|
|50,000 - 60,000||236||7||2,601||11|
|60,000 - 70,000||167||5||2,451||11|
|70,000 - 80,000||83||3||1,468||6|
|80,000 - 90,000||67||2||1,447||6|
|90,000 - 100,000||40||1||1,008||4|
|100,000 - 150,000||72||2||2,482||11|
This table includes tax on New Zealand Superannuation and major Social Welfare benefits, but excludes ACC levies, Working for Families tax credits, independent earner tax credits and anyone who is under 15. Data are projected for the year ended March 2010 and include the changes to tax rates and thresholds on 1 April 2009.
Tax scale from 1 April 2009
12.5c per $1 on income up to $14,000
21c per $1 on income between $14,001 and $48,000
33c per $1 on income between $48,001 and $70,000
38c per $1 on income over $70,000
Independent earner tax credit (IETC) from 1 April 2009
$10 per week on income between $24,000 and $44,000
Annual entitlement abated at 13c per $1 over $44,000
$0 per week on income of $48,000 and over
To be eligible for the IETC an individual must not receive Working for Families tax credits, New Zealand Superannuation or a benefit.
Personal income tax examples
|Annual gross income from salary or wage||$42,000|
|Annual tax liability||$7,630|
|Annual Independent earner tax credit||$520|
|Net tax paid||$7,110|
|Annual net income||$34,890|
The tax payer presented in Example 1 is not in receipt of any additional core government benefits, Working for Families tax credits or New Zealand Superannuation payments. The annual value of the independent earner tax credit presented in Example 1 was determined by rates and thresholds applicable from 1 April 2009.
|Annual gross income from salary or wage||$50,000|
|Annual tax liability||$9,550|
|Working for Families tax credits||$11,210|
|Net tax credit||$1,660|
|Annual net income||$51,660|
|Annual gross income from salary or wage||$80,000|
|Annual tax liability||$14,660|
|Working for Families tax credits||$5,210|
|Net tax credit||$9,450|
|Annual net income||$70,550|
The Working for Families tax credit presented in Examples 2 and 3 are in two parts, Family Tax Credit (FTC) and In-Work Tax Credit (IWTC). An income split of $50,000 and $30,000 between both caregivers has been assumed in Example 3. Entitlement and value of the Working for Families tax credit depends on: the amount and type of income a family receives; the number and age of children within a family; and the weekly number of hours worked by caregivers. It is assumed that the residence tests for the tax credits and the number of hours worked for the in-work tax credit have been met. For more information please visit: www.workingforfamilies.govt.nz
How do tax scale changes affect tax revenue?
|By increasing thresholds by $1,000:||($m)|
|Bottom threshold from $14,000 to $15,000||160|
|Middle threshold from $48,000 to $49,000||75|
|Top threshold from $70,000 to $71,000||12|
|By decreasing tax rates by 1%:||($m)|
|Top individual rate from 38% to 37%||101|
|Upper middle rate from 33% to 32%||92|
|Lower middle rate from 21% to 20%|
|Bottom rate from 12.5% to 11.5%||331|
|Company tax rate from 30% to 29%||180|
|GST rate from 12.5% to 11.5%||770|
Estimated decrease in tax revenue for the year ended March 2010 for tax thresholds and rates as they stand at Budget day. This allows for interaction between tax types, but makes no allowance for feedback effects from the economy.
How does a 1% change in growth affect tax
|Wages and salaries||270|
|Taxable business profits||110|
|Spending by households||120|
Estimated effect on a full year's revenue of a one-percentage point change in the growth or income or spending source in 2009/10.
What is the full-year cost of... ?
|$1 a week increase (in the hand) to NZ Super||28|
|$1 a week increase (in the hand) to other benefits||18|
|$1 billion increase in government debt||47|