PAYE tax bill

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Forums › Finance and wealth management › PAYE tax bill

knoydart

904 posts

Ultimate Geek

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#270436 9-May-2020 21:07

Hi,

just wondering if anyone has ever had a >$500 tax bill as a purely PAYE tax payer?

I went onto the IRD website to submit my IR3 last night and it appears I need to pay them a few $ to say the least. Looking at each individual pay slip I've been taxed appropriately for my tax code (M), and don't have a student loan or other IRD dedications being made. No change in tax bracket happen last year either so it appears on the surface a little strange.

Cheers

Knoydart

snnet

1377 posts

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#2479957 9-May-2020 21:09

Yes, when I left a job I had to pay $1200 because with termination pay everything went out of kilter and although everything was done with PAYE something went awry

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tomgeeknz

923 posts

Ultimate Geek

#2479990 9-May-2020 23:31

I for one have not, could be good to check your annual income vs tax paid here: https://paye.net.nz/ to see if it lines up with your actual tax paid.

tardtasticx

3050 posts

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#2479993 9-May-2020 23:46

Definitely check that it matches up.

Last year I got a letter from IRD saying I'd under-paid my student loan (which was coming out of my pay packet with PAYE of course) and owed a few hundred. They also contacted my employer telling them to do compulsory extra deductions.
I used the calculator on their own website to figure out what I should've paid for every payment cycle for the 3 months they said I supposedly underpaid, they all matched 100%.
Called them up and queried, they did the calculations again and couldn't get the same result as the letter so amended it on my account.

Not saying they're going to be wrong all the time, but they aren't 100% right either. Always pays to check.

Rickles

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#2479994 9-May-2020 23:48

@knoydart … my wife and I have had a couple 'adjustments' like that in years gone by.

Usually happens when one of us either had a pay increase, bonus payment, change in super/Kiwi Saver deduction, or investment interest not included until end of financial year.

Remember, couples are assessed together, and additional payments etc are spread over the 52 weeks of PAYE, even if the correct percentage of tax is taken in bulk at the time of any single increase.

Your online Tax Return should have complete details of gross and deductions etc for you to view.

sonyxperiageek

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#2480002 10-May-2020 00:33

"Couples are assessed together..." Really? I've never heard of that!

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Oblivian

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#2480004 10-May-2020 00:43

Kiwisaver and investment accounts are the biggest gotcha

You need to correct/check your RWT rate matches income. Stung me a few hundy last year when I realized a couple still had me on the lower tier. Quick to say you gotit set too high, forget to tell you to raise it.

Paid to bank, Tied to paye, but apparently they can't work out how much went in over the period and adjust it accordingly if needed

cshwone

1002 posts

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#2480064 10-May-2020 06:13

Rickles:

@knoydart … my wife and I have had a couple 'adjustments' like that in years gone by.

Usually happens when one of us either had a pay increase, bonus payment, change in super/Kiwi Saver deduction, or investment interest not included until end of financial year.

Remember, couples are assessed together, and additional payments etc are spread over the 52 weeks of PAYE, even if the correct percentage of tax is taken in bulk at the time of any single increase.

Totally and utterly incorrect.

Handle9

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#2480066 10-May-2020 06:50

sonyxperiageek: "Couples are assessed together..." Really? I've never heard of that!

Yeah. That'd be because they aren't.

eracode

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#2480071 10-May-2020 07:36

Couples can sort of be 'assessed together' to the extent that investments may be owned in joint names but the investment income (interest, dividends, etc) can only be taxed under one tax number, which you have to nominate to the IRD. When you do the tax returns, if you wish you can re-assign the investment income and split it between couple's two IRD numbers. But this is 'income splitting' - and is not being 'assessed together'.

Sometimes I just sit and think. Other times I just sit.

knoydart

904 posts

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#2480164 10-May-2020 10:10

Thanks for all the replies.

The calculations on PAYE.net.nz tally up with the IRD one, as well as individual pay slips. I think it looks like the PAYE rates can't deal significant variations in salary across a tax year.

Rickles

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#2480177 10-May-2020 10:22

>"Couples are assessed together..." Really? I've never heard of that!

Apologies, meant to say that this can happen for joint investments, dividend payments, etc.

decibel

276 posts

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#2480263 10-May-2020 10:37

knoydart:... I think it looks like the PAYE rates can't deal significant variations in salary across a tax year.

They tax today on the assumption you will be on the same pay for the rest of the year.

The only people who DON'T need to check their tax each year are those people who have had exactly the same pay for the whole year.