They giveth with one hand – and snatch it right back with the other one.
Taxes are going down. Yay! Well, you at least got the good news first.
Unfortunately – there’s also some bad news to go with it. ACC contributions are going up at the same time.
Huh? Well, ACC stands for the Accident Compensation Commission, and they add a small percentage to the tax you pay to cover – well – compensation that is paid out for accident victims.
The rate is going up from 1.4% to 1.7% in April next year, and it is paid along with your PAYE tax. You just need to add that into your calculations that I showed you in the last blog. It means that the top tax rate of 38% actually works out at you paying 39.7%. The difference between paying 1.4% and 1.7% works out at you losing $18.75 a month on a $75,000 salary.
You are still going to get a tax cut – just not as much. It’s also better than a smack in the mouth I guess, but I do wish they wouldn’t drop taxes one second and raise them the next.
Still, New Zealand taxes are lower than UK taxes, and 1.7% for ACC is still a whole lot better than 11% National Insurance.
Once the figures are finalised – they will be added into the updated Inland Revenue calculators – so you will be able to see exactly what your take home pay is going to be. These calculators will also be updated to take into account the new Kiwisaver options of a 2% contribution. Until then – you have to work it out the hard way – and just add 1.7% to each of the tax bands.
Related posts:
- What do you do just in case things do go to hell in a hand basket?
- The NZ budget what does it mean for you
- Kiwisaver Changes – Arggghhhh
Comments
2 Comments on They giveth with one hand – and snatch it right back with the other one.
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Mike Harmon on
Sun, 21st Dec 2008 7:00 pm
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Avalon on
Sun, 21st Dec 2008 9:00 pm
Nice site. There
Thank you very much. Hopefully as time goes on it will get even better 
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