Key Facts for Taxpayers 2009

The Key Facts for Taxpayers card is a summary of tax, expenditure and income data from the Budget Economic and Fiscal Update (BEFU) 2009. It was released at the same time as other Budget 2009 documents on 28 May 2009.

The Key Facts for Taxpayers document is available in HTML format below and for viewing or download in Adobe PDF format.

Key Facts for Taxpayers (Part 1)#

Who pays income tax... and how much?#

Who pays income tax... and how much?
Annual individual taxable income ($)	0	%	($m)	%
	Number of people		Tax paid
Zero	241	7	0	0
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
150,000+	46	1	3,415	15
All	3,317	100	23,330	100

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#

Example 1: Single earner
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.

Example 2: Single income couple with three children under 13
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

Example 3: Combined income couple with three children under 13
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:
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

390390

By decreasing tax rates by 1%:
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#

How does a 1% change in growth affect tax
Tax source	($m)
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... ?#

What is the full-year cost of... ?
	($m)
$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

Further Budget 2009 information is available on:

http://www.treasury.govt.nz/budget/2009

Ready reckoner for tax rate and base changes:

http://www.treasury.govt.nz/government/revenue/estimatesrevenueeffects

Key Facts for Taxpayers (Part 2)#

New Zealand’s nominal GDP#

New Zealand's nominal GDP

Consensus forecasts of trading partner growth fall over time#

Consensus forecasts of trading partner growth fall over time

Consensus forecasts for 2009 growth of New Zealand's trading partners. The annual average percentage change in real production GDP for the 2009 calendar year is presented above.

Where do core Crown expenses go?#

2009/10: $65.3b (37.3% of GDP)

Where do core Crown expenses go?

Social security & welfare includes New Zealand Superannuation, the Accommodation Supplement and the Domestic Purposes, Unemployment, Sickness & Invalid's benefits.