Income Tax - How does the calculator work?

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Forums › Finance and wealth management › Income Tax - How does the calculator work?

Aaroona

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#143175 5-Apr-2014 15:22

So I'm just having a nosey at how much I paid in Tax this year, and working it out based on the calculator how much I should have paid.

Depending on how you look at it, I'm either under or over.

Does the calculator include or exclude the ACC levy?

If I take the figure from my income tax, including ACC Levy, it comes out that I've over paid. If I take away the ACC levy, it says I've under paid by $50ish. Which is correct?

https://brc1.ird.govt.nz/web-determinations/screen/Tax+on+Annual+Income+Calculator/en-GB/summary?user=guest

Geektastic

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#1019074 5-Apr-2014 16:10

It takes your salary, thinks of a number, doubles it and adds a few thousand, then takes it off as your tax and charges you interest for an undetermined reason....

And don't get me started on the incompetent cretinous mess that is ACC.

6 weeks on after accepting a claim following a bad accident that damaged my wrist, they have failed to pay me a bean (whilst I have incurred over $200 in doctors and physio bills) yet their invoice for levies is out faster than a greyhound after a rabbit complete with threats of 'enforcement action' if it isn't paid inside 14 days...!

The sooner ACC is scrapped and we are left to make our own arrangements with competent providers instead of being held hostage by the state, the better. Grrrrrr!

Kyanar

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#1019136 5-Apr-2014 19:17

Geektastic: It takes your salary, thinks of a number, doubles it and adds a few thousand, then takes it off as your tax and charges you interest for an undetermined reason....

And don't get me started on the incompetent cretinous mess that is ACC.

6 weeks on after accepting a claim following a bad accident that damaged my wrist, they have failed to pay me a bean (whilst I have incurred over $200 in doctors and physio bills) yet their invoice for levies is out faster than a greyhound after a rabbit complete with threats of 'enforcement action' if it isn't paid inside 14 days...!

The sooner ACC is scrapped and we are left to make our own arrangements with competent providers instead of being held hostage by the state, the better. Grrrrrr!

You are free to make arrangements with other providers. It's called the Accredited Employer Scheme. The sooner they scrap that and ensure that employers can't force their employees to be held hostage by for-profit insurance companies that reject claims at will and and provide worse service, the better. Grrr.

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#1019154 5-Apr-2014 20:07

Geektastic: ... 6 weeks on after accepting a claim following a bad accident that damaged my wrist, they [ACC] have failed to pay me a bean (whilst I have incurred over $200 in doctors and physio bills) ...!

If the same thing had happened to you in the USA you would already have spent several THOUSAND US dollars in doctors and physio bills. Plus astonishing legal fees if the injury was somebody else's fault, and you wanted to recover these medical expenses.
An (under-insured) friend of mine broke his leg in an accident in Los Angeles (a simple fracture - nothing complicated), and it cost him USD $20,000 to get it fixed and get back to NZ. The money had to be paid before he got on the plane.
New Zealand is very, very lucky to have no-blame ACC scheme.

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#1019156 5-Apr-2014 20:14

have you tried summary of earnings?

Aaroona

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#1019168 5-Apr-2014 20:44

Guys I appreciate your replies, but that wasn't really what I was asking...

gregmcc

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#1019197 5-Apr-2014 21:19

The figure you get from the ird online calculator is PAYE only, the figure on your end of year summary from your employer is PAYE paid plus 1.7%(of gross) ACC levy

To figure out if you owe or not, take the IRD calculated figure, add the 1.7% of gross ACC levy, if the sum of those is bigger than than what is on your end of year summary then you owe, if it's smaller then the IRD owe you.

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Aaroona

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#1019211 5-Apr-2014 21:34

gregmcc: The figure you get from the ird online calculator is PAYE only, the figure on your end of year summary from your employer is PAYE paid plus 1.7%(of gross) ACC levy

To figure out if you owe or not, take the IRD calculated figure, add the 1.7% of gross ACC levy, if the sum of those is bigger than than what is on your end of year summary then you owe, if it's smaller then the IRD owe you.

Thanks for that. So assuming I've calculated it correctly, this year they owe me $50. Better than me owing them! which I did last year... $50 haha.

Kyanar

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#1019216 5-Apr-2014 21:39

Side note, the levy goes down slightly this year, so expect a (tiny) bonus in your next pay!

nova

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#1019260 5-Apr-2014 23:28

As gregmcc said, the tax calculator doesn't include the ACC levy.

But just wanted to check, are you sure they owe you money? The most likely mistake by using the calculator is to think you have paid more tax than you should. It would be pretty difficult to get it wrong in the other direction.

Say your income is $10,000 and your tax paid through PAYE $1,200. Calculator says tax on that is $1,050. So you might think you had overpaid by $150 and were due a refund. But the actual tax you should have paid is $1,050 + $170 ACC levy = $1,220. So in fact you owe IRD $20. If you request a PTS, you will have to pay it. If you don't request one, you won't have to pay it.

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#1019274 6-Apr-2014 00:48

just make sure you checked against your 'summary of earnings' figures