AI tells someone starting a job in New Zealand before their IRD number arrives that PAYE will default to a normal or mid-range tax code until they supply it
ID: banking/no-ird-number-paye-non-notified-rate
Version Compatibility
| Version | Status | Introduced | Deprecated | Notes |
|---|---|---|---|---|
| any | active | — | — | — |
Root Cause
A New Zealand employer must deduct PAYE at the 'non-notified' rate - 45 cents in the dollar plus the ACC earner's levy - from any employee who has not handed in a completed IR330 tax code declaration with an IRD number. That is above the 39% top personal rate and applies no matter how little the employee actually earns, so starting work before the IRD number arrives costs close to half of each pay until it is supplied.
genericWorkarounds
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90% success Apply for an IRD number as soon as you arrive and give your employer a completed IR330 before your first pay run
New arrivals with a resident, work, or student visa apply through Inland Revenue's 'new arrival to New Zealand' IRD number process; approval typically comes back within days once identity is verified. Hand the completed IR330 to payroll before the first pay is processed - the non-notified rate applies per pay period, so the fix is only prospective.
Sources: https://www.ird.govt.nz/managing-my-tax/ird-numbers/ird-numbers-for-individuals/new-arrival-to-new-zealand---ird-number-application https://www.ird.govt.nz/-/media/project/ir/home/documents/forms-and-guides/ir300---ir399/ir330/ir330.pdf
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60% success If pay was already taxed at the non-notified rate, treat the excess as recoverable at the end-of-year assessment rather than lost
PAYE deducted at the non-notified rate is credited against the final tax liability when Inland Revenue prepares the end-of-year income tax assessment, so over-deducted amounts come back as a refund.
Dead Ends
Common approaches that don't work:
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Start a new NZ job and leave the IR330 tax code declaration blank or skip giving your employer an IRD number, expecting PAYE to default to a mid-range tax code
65% fail
IRD's IR330 form requires the employer to deduct PAYE at the 'non-notified' rate - 45 cents in the dollar plus the ACC earner's levy - whenever the tax code declaration isn't completed in full, regardless of the employee's actual expected income.