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RD 10C: Calculating amounts of tax following changes to rates or thresholds
or “How to calculate tax when rates or thresholds change”
You could also call this:

“How tax amounts can be adjusted for special cases”

In certain cases, the Commissioner may change the amount of tax for a PAYE income payment. This can happen if there are special circumstances for an employee or a group of employees. When this occurs, the PAYE rules are applied as if they’ve been changed.

Sometimes, it’s hard to work out the tax for a PAYE income payment using the normal rules. This might be because of how much the payment is, how many dependants the employee has, or for other reasons. In these cases, the Commissioner will decide the amount of tax. They’ll look at how tax is worked out for similar payments to help them decide.

For some specific types of payments, the Commissioner works with other people to decide the tax amount. These payments include main benefits, New Zealand superannuation, and veteran’s pensions. The Commissioner talks to the chief executive of the department that manages these payments to work out the tax.

The Commissioner also works with the Secretary for Education to decide the tax for allowances paid under the Education and Training Act 2020.

If the Commissioner decides that a person can subtract some of their expenses from a schedular payment, this affects how the tax is calculated. The amount of tax is based on the payment minus the expenses the Commissioner has allowed.

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Next up: RD 12: Multiple payments of salary or wages

or “How tax is calculated when you receive multiple salary or wage payments in a week”
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Part R General collection rules
Employment-related taxes: Calculating amounts of tax

RD 11Amount of tax in certain circumstances

  1. Despite sections RD 2 to RD 10, the Commissioner may, in special circumstances, reduce the amount of tax for a PAYE income payment to an employee or a class of employees. The PAYE rules then apply as if amended.

  2. If the amount of tax for a PAYE income payment cannot be determined under schedule 2 (Basic tax rates for PAYE income payments) or under regulations made under this Act because of the size of the PAYE income payment, or the number of the employee’s dependants, or for any other reason, the amount of tax for the payment must be determined by the Commissioner, taking into account the factors considered in fixing the amount of tax for other similar payments.

  3. Despite section RD 10(1), the amount of tax for a PAYE income payment that is a payment of any of the following benefits must be determined by the Commissioner in consultation with the chief executive of the administering department:

  4. a main benefit:
    1. New Zealand superannuation:
      1. a veteran’s pension.

        1. Despite section RD 10(1), the amount of tax for a PAYE income payment that is a payment of an allowance under regulations made under section 645 of the Education and Training Act 2020 must be determined by the Commissioner in consultation with the Secretary for Education.

        2. If the Commissioner makes a determination under section RD 8(3) in relation to the amount or proportion of expenditure that a person incurs in deriving a schedular payment, the basis for calculating the amount of tax for the schedular payment is the reduced amount found after subtracting the amount or proportion of expenditure determined by the Commissioner from the amount of the payment. This subsection overrides section RD 10(3).

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        Notes
        • Section RD 11 heading: replaced, on , by section 45(1) of the New Zealand Superannuation and Veteran’s Pension Legislation Amendment Act 2020 (2020 No 36).
        • Section RD 11(3) heading: replaced, on , by section 45(2) of the New Zealand Superannuation and Veteran’s Pension Legislation Amendment Act 2020 (2020 No 36).
        • Section RD 11(3) heading: amended, on , by section 141 of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
        • Section RD 11(3): replaced, on , by section 45(2) of the New Zealand Superannuation and Veteran’s Pension Legislation Amendment Act 2020 (2020 No 36).
        • Section RD 11(3)(a): replaced, on , by section 141 of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
        • Section RD 11(3B) heading: inserted, on , by section 45(2) of the New Zealand Superannuation and Veteran’s Pension Legislation Amendment Act 2020 (2020 No 36).
        • Section RD 11(3B): inserted, on , by section 45(2) of the New Zealand Superannuation and Veteran’s Pension Legislation Amendment Act 2020 (2020 No 36).
        • Section RD 11(4) heading: added (with effect on 1 April 2008), on , by section 507(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
        • Section RD 11(4): added (with effect on 1 April 2008), on , by section 507(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
        • Section RD 11 list of defined terms amount: inserted (with effect on 1 April 2008), on , by section 507(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
        • Section RD 11 list of defined terms income-tested benefit: repealed, on , by section 141 of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
        • Section RD 11 list of defined terms main benefit: inserted, on , by section 141 of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
        • Section RD 11 list of defined terms schedular payment: added (with effect on 1 April 2008), on , by section 507(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
        • Section RD 11 compare note: amended (with effect on 1 April 2008), on , by section 507(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).