End of Year Personal Income Tax Returns

Got an unexpected NZ tax bill? Find out why a 53-week pay year might be the cause and how the IRD automatically writes off this specific debt.

Previously published 24 June 2021

A lot of people this year are finding that once their income tax assessment has been calculated automatically, they end up having tax to pay – and suddenly it’s panic stations! (Don’t worry, this happened to me, and I did the same!).

There may be a reason for it! In the Financial Year Ended 31 March 2021, there were 53 weekly pay periods, as opposed to 52 weekly pay periods. This happens once every 7 years.

If your assessed tax to pay is only because you had an extra pay period (eg. 27 fortnightly pays instead of 26, or 53 weekly pays instead of 52) IRD will write off the full amount (note this is only effective from the 2020 tax year onwards).

IRD will not write off the tax bill if:

You used a tailored tax code during the year
Your tax code or tax rate was wrong
You have a Working for Families entitlement

So what is the process to write off the tax?

If you are eligible for your tax to be written off and receive an automatically-issued income tax assessment, the write off will be applied at the time IRD issue your assessment.

If you are eligible for your tax to be written off and receive a request that more information is required, once this has been confirmed you will receive an income tax assessment that will show if any automatic write off has been applied.

IRD have more information here.

Categories: : Tax