What is withholding tax?
Withholding tax is tax paid on interest earned from interest-bearing accounts such as Term Deposits and Savings accounts. ASB deducts this tax before the interest is paid to you. We then pay this tax to Inland Revenue (IRD) on your behalf.
The different types of withholding tax are Resident Withholding Tax (RWT) and Non-Resident Withholding Tax (NRWT). Approved Issuer levy (AIL) may be paid as an alternative to NRWT.
If your IRD number is included on the IRD’s RWT Exemption Register, then withholding tax may not apply to you.
Resident Withholding Tax
RWT is the tax deducted on interest paid to New Zealand tax residents on your deposit accounts. For more information about Resident Withholding tax and which tax rate you should be on, check out the Inland Revenue website.
What tax rate should I use?
Your RWT rate is based on your taxable income/tax status for the year. There are different rates for individuals, trusts, companies, and partnerships. You can find the current Personal RWT rates below or refer to the IRD website for more information.
|Your personal taxable income||Resident Withholding Tax rate|
|Up to $14,000||10.5%|
|$14,001 - $48,000||17.5%|
|$48,001 - $70,000||30%|
|$70,001 - $180,000||33%|
|Over $180,000 (Available from 1 October)||39%|
You should ensure your RWT rate is correct for your level of taxable income. Selecting a rate that is too low may mean you have an end of year tax liability. Selecting a rate that is too high may mean you are paying too much tax. If you are paying too much RWT, you may get a refund at the end of the year from the IRD after assessment of your total taxable income for the year.
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