Calculating Tax Refund (Estimate)

Please note this sub-forum does not provide professional finance advice. You should seek advice from a licensed financial advisor.

To post in this sub-forum you must have made 100 posts or have Trust status or have completed our ID Verification.

If investing please consider our affiliate link for new accounts: Sharesies.

Forums › Finance and wealth management › Calculating Tax Refund (Estimate)

firefuze

510 posts

Ultimate Geek
+1 received by user: 85

#269800 8-Apr-2020 16:01

I have my end of year figures from my employers and want to calculate if I’m likely to have a refund or tax bill.

Logging into IRD’s MyIR there is no option to file or a summary etc available yet.

Is there a way I can calculate or at least estimate my tax refund? Figured the web would be covered with online calculators but they are just fronts for tax refund agents where you have to supply your personal details to get an answer.

One link to the IRD website seemed promising but results in a dead link when trying to launch the calculator. Another online calculator couldn’t accommodate having two jobs/incomes and just made a mess of the results.

1 | 2

3848 posts

Uber Geek
+1 received by user: 1220

Trusted

Lifetime subscriber

#2457530 8-Apr-2020 16:07

There use to be an ir3 calculate form on their site.
However if you're a full time employee with no working for families or other tax credits the updated ird/tax systems is bang on. Very few full time employees get refunds etc now as the systems in place do the correct taxing etc.

As you have 2 jobs you can try and use the PAYE calculate but you will need to run it twice as you will have 2 different tax codes.

nickb800

2735 posts

Uber Geek
+1 received by user: 829

Trusted

#2457543 8-Apr-2020 16:17

For a third party calculator, try https://www.paye.net.nz/calculator (they are just a calculator, not a front for tax refund services).

mdf

3566 posts

Uber Geek
+1 received by user: 1519

Trusted

#2457579 8-Apr-2020 16:48

I have always used the "tax on taxable income" calculator. However it also seems to be down for me - probably the one you've already tried.

cshwone

1092 posts

Uber Geek
+1 received by user: 844

#2457587 8-Apr-2020 16:55

tripp:

As you have 2 jobs you can try and use the PAYE calculate but you will need to run it twice as you will have 2 different tax codes.

To work out the refund you run the PAYE calculator once against your total income from the two jobs. You then compare than number against the tax you have paid (on MyIR) and the difference will be the refund due.

Nate001

677 posts

Ultimate Geek
+1 received by user: 465

#2457588 8-Apr-2020 16:57

If both jobs were simply PAYE then:

1) Add your total gross income

2) Add total PAYE

3) Run in calculator and compare what you should have paid

boosacnoodle

1270 posts

Uber Geek
+1 received by user: 855

#2457625 8-Apr-2020 17:35

I had IRD send me out a physical IR3 form this year, even though every other year I have done it online. Maybe you can fill out a paper IR3 to calculate it?

Lenovo

Shop now for Lenovo laptops and other devices (affiliate link).

firefuze

510 posts

Ultimate Geek
+1 received by user: 85

#2457753 8-Apr-2020 20:03

nickb800:

For a third party calculator, try https://www.paye.net.nz/calculator (they are just a calculator, not a front for tax refund services).

According to this website I would owe IRD about $180.00 (not including IETC credit)

My understanding: I get taxed at a higher rate on my 2nd income, right? (S SL tax code vs M SL)

I thought if I ended up under a certain threshold by end of financial year I may/would be eligible to get a lot of it back?

Demonstrates my limited knowledge in this area.

firefuze

510 posts

Ultimate Geek
+1 received by user: 85

#2457755 8-Apr-2020 20:04

mdf:

I have always used the "tax on taxable income" calculator. However it also seems to be down for me - probably the one you've already tried.

yeap, that’s the one I was trying to get to. At least I know it’s not just me.

mdf

3566 posts

Uber Geek
+1 received by user: 1519

Trusted

#2457786 8-Apr-2020 20:51

firefuze:

My understanding: I get taxed at a higher rate on my 2nd income, right? (S SL tax code vs M SL)

The tax system in NZ is progressive:

On your first 14K of income: 10.5%
14-48K: 17.5%
48-70K: 30%
70K+: 33%

So if you made 44K, you would pay 10.5% on the first 14K, and 17.5% on the remaining 30. In practice, your employer works out and deducts a blended rate and PAYE, rather than having the amount of tax you pay in a year change - in this case it will be something like 15.3%.

This applies to your total annual income, regardless of whether you work 1, 2, 3 or 15 jobs.

Say you have two jobs each paying 25K (50K total). The first job will be taxed less, since the first 14K will be at a lower rate than the remaining 11K. But the second job you should be taxed at 17.5% for almost all of it (the last 2K at 30%).

In an ideal world, you have an idea of what your total income will be for the year and give the right tax code to both your first and second employers. e.g. If you make 50K a year, you should be (I think) M and SH (this depends a lot on other factors though). But appreciate ideal doesn't always correspond with real world.

If you have tax to pay, I am guessing that your secondary tax code might not be right.

Edit: clarification

langi27

683 posts

Ultimate Geek
+1 received by user: 239

#2457962 9-Apr-2020 09:52

I have a question that is slightly related to this forum.

Can i offset my kiwisaver losses (about $20k so far, thanks COVID-19....not) against my own pesonnal PAYE tax? i pay tax on the earnings, so figure i should be able to claim the lossses as well.

Anyone know or can link me to an article or info page on stuff like this would be appreicated

mdf

3566 posts

Uber Geek
+1 received by user: 1519

Trusted

#2457972 9-Apr-2020 10:03

langi27:

I have a question that is slightly related to this forum.

Can i offset my kiwisaver losses (about $20k so far, thanks COVID-19....not) against my own pesonnal PAYE tax? i pay tax on the earnings, so figure i should be able to claim the lossses as well.

Anyone know or can link me to an article or info page on stuff like this would be appreicated

So far as I know, all Kiwisaver schemes are locked in portfolio investment entities (PIEs). If that is the case for your scheme, then no. You pay tax on the earnings within the PIE at your prescribed investor rate (PIR), rather than getting a tax bill. In the same way, the losses can be offset against future earnings, but only within the PIE. You can't get the benefit of the losses now to offset your PAYE.

Lego

Shop now for Lego sets and other gifts (affiliate link).

quickymart

14940 posts

Uber Geek
+1 received by user: 13953

ID Verified

#2458013 9-Apr-2020 10:04

I thought I was going to get a refund last year (my wife used the IRD calculator), I ended up owing 63c which was written off. I think in future I'll just wait for IRD to send me the information, as I've had too many times where I try and work it out, think I'm due a refund, and turns out I don't get anything or I owe them something.

Nate001

677 posts

Ultimate Geek
+1 received by user: 465

#2458028 9-Apr-2020 10:31

firefuze:

According to this website I would owe IRD about $180.00 (not including IETC credit)

My understanding: I get taxed at a higher rate on my 2nd income, right? (S SL tax code vs M SL)

I thought if I ended up under a certain threshold by end of financial year I may/would be eligible to get a lot of it back?

Demonstrates my limited knowledge in this area.

Looking back now, did you have the correct tax codes for both jobs?

firefuze

510 posts

Ultimate Geek
+1 received by user: 85

#2467489 21-Apr-2020 23:11

Had correct codes for both. IRD calculators are up and operational on their website again. Using them shows a $600 refund

nova

260 posts

Ultimate Geek
+1 received by user: 143

Trusted

#2467568 22-Apr-2020 08:12

firefuze:

Had correct codes for both. IRD calculators are up and operational on their website again. Using them shows a $600 refund

Are you including the ACC Earners Levy in your calculation? The IRD calculators don't include it, so you need to subtract your ACC levy from the tax you have paid before doing the comparison on the IRD site. Multiply your total pre-tax income by 1.39% to get the amount paid to ACC. More details here:

https://www.ird.govt.nz/income-tax/income-tax-for-individuals/acc-clients-and-carers/acc-earners-levy-rates

1 | 2