Plain language law

New Zealand law explained for everyone

 Plain Language Law homepage
Back to
RD 10: Amounts of tax for PAYE income payments
or “How much tax is taken from your pay”
You could also call this:

“How to calculate and deduct tax from schedular payments”

This section explains how to calculate the tax for schedular payments. If the person making the payment knows the payee’s name and tax file number, they must take out tax at different rates. These rates can be the rate the payee chooses, a special rate set by the Commissioner, or the rate in schedule 4.

If the person making the payment has been told about a specific rate, they must use that rate. They should subtract the amount they were told about or the percentage given, and pay this to the Commissioner.

When the person making the payment doesn’t know the payee’s name and tax file number, they must take out 20% tax if the payee is a non-resident company. For all other cases, they must take out 45% tax.

If the payee is a non-resident entertainer, the tax rate is always 20%, no matter what other rules say.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

Next up: RD 10C: Calculating amounts of tax following changes to rates or thresholds

or “How to calculate tax when rates or thresholds change”
Next

Part R General collection rules
Employment-related taxes: Calculating amounts of tax

RD 10BAmounts of tax for schedular payments

  1. This section applies to determine the amount of tax for a schedular payment for the purposes of section RD 10(3)(a).

  2. When the person making the schedular payment has been notified under section 24I of the Tax Administration Act 1994 of the payee’s name and tax file number, the person must withhold an amount of tax for the payment at—

  3. the payee’s elected rate, for a payee, other than a payee referred to in paragraph (b), who chooses a tax rate under section 24F(3) of that Act:
    1. the special tax rate set by the Commissioner, for a payee who has been provided with a special tax rate under section 24G of that Act:
      1. in other cases, the applicable tax rate set out in schedule 4 (Standard rates of tax for schedular payments).

        1. Despite subsection (2), if the person making the schedular payment has been notified of a rate under section 24F(4) of that Act, the person must use that rate in relation to the payment, subtracting the amount notified or the amount equal to the percentage prescribed, as applicable, and paying the amount to the Commissioner.

        2. When the person making the schedular payment has not been notified of the payee’s name and tax file number under section 24I, the person must withhold an amount of tax for the payment that is—

        3. for a payee that is a company that is non-resident, 20% of the amount of the payment:
          1. in all other cases, 45% of the amount of the payment.

            1. Despite subsections (2), (3), and (4), the tax rate, if the payee is a non-resident entertainer, is 0.20.

            Notes
            • Section RD 10B: inserted, on , by section 91 of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).
            • Section RD 10B(2) heading: replaced, on , by section 199(1) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
            • Section RD 10B(2): replaced, on , by section 199(1) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
            • Section RD 10B(3) heading: replaced, on , by section 199(1) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
            • Section RD 10B(3): replaced, on , by section 199(1) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
            • Section RD 10B(4) heading: replaced, on , by section 199(1) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
            • Section RD 10B(4): replaced, on , by section 199(1) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
            • Section RD 10B list of defined terms amount: inserted, on , by section 199(2) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
            • Section RD 10B list of defined terms Commissioner: inserted, on , by section 199(2) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).