News | Features
14 Aug 2022 12:07
NZCity News
NZCity CalculatorReturn to NZCity

  • Start Page
  • Personalise
  • Sport
  • Weather
  • Finance
  • Shopping
  • Jobs
  • Horoscopes
  • Lotto Results
  • Photo Gallery
  • Site Gallery
  • TVNow
  • Dating
  • SearchNZ
  • NZSearch
  • Crime.co.nz
  • RugbyLeague
  • Make Home
  • About NZCity
  • Contact NZCity
  • Your Privacy
  • Advertising
  • Login
  • Join for Free

  •   Home > News > Business > Features

    Tax Cuts Bring Kiwisaver Into Reach For Many

    The "I can't afford KiwiSaver" excuse is about to get weaker for many New Zealanders. Tax cuts come into effect from October 1, and many families will also benefit from changes to the Working for Families tax credit and income threshold. The extra money will cover at least half of many people's KiwiSaver contributions, sometimes more.


    What's more, further cuts are in store if Labour is re-elected. And while National hasn't yet outlined its tax plans, it has promised bigger cuts than Labour.

    Many people will argue that even with more money they still won't be able to spare any for savings. But if you can possibly acknowledge that you've managed up until now, and put the extra cash into KiwiSaver before you get used to receiving it, you should be much better off in the long run.

    It's a pity not to get your share of the incentives in the taxpayer-funded savings scheme. And employees have to commit to contributing for only one year, while for non-employees there is no commitment.

    Let's look first at the tax cuts. The current tax rates are: 15 per cent on the first $9,500, then 21 per cent up to $38,000, then 33 per cent up to $60,000, and 39 per cent above $60,000.

    The rates from October 1 are: 12.5 per cent on the first $14,000, then 21 per cent up to $40,000, then 33 per cent up to $70,000, and 39 per cent above $70,000.

    Under Labour, the rates would drop again in April 2010 and again in April 2011, at which time they would be: 12.5 per cent on the first $20,000, then 21 per cent up to $42,500, then 33 per cent up to $80,000, and 39 per cent above $80,000.

    What does this mean to you?

    If you earn $20,000 a year, you'll receive $12 more in the hand each week from October 1, rising to $22 a week from 2011 under Labour, and presumably more under National. In KiwiSaver, if you contributed 4 per cent of your pay, that would amount to $15 a week.

    On $40,000, the first tax cut is $16 a week, rising to at least $26 a week by 2011. Your KiwiSaver contribution would be $31 a week.

    On $60,000, the first tax cut is $16 a week, rising to at least $32 a week. Your KiwiSaver contribution would be $46 a week.

    On $80,000, the first tax cut is $28 a week, rising to at least $55 a week. Your KiwiSaver contribution would be $62 a week.

    Added to this are the Working for Families increases, which vary with income and number of children. Here are some examples of how much families with children under 13 will gain each week from the tax cuts and Working for Families changes:

    • One earner on $45,000 with two children will get $31 more now, rising to at least $63 from April 2011. Their KiwiSaver contribution would be $35.

    • Two earners on $45,000 and $20,000 with two children will get $43 more now, rising to at least $85 from 2011. Their KiwiSaver contributions would be $35 and $15. Perhaps one parent could join now and the other in a year or two.

    • One earner on $35,000 with one child will get $16 more now, rising to at least $31 from April 2011. Their KiwiSaver contribution would be $27.

    Chances are you don't fit into any of these examples. You might want to wait and see exactly how much better off you are. But don't wait too long. You may get used to spending the extra money instead of joining KiwiSaver.

    © 2022 Mary Holm, NZCity

     Other Features News
     10 Sep: Spring clean your finances
     13 Aug: Plan ahead to give yourself a debt-free Christmas!
     10 Jul: Wise up to clear credit card debt
     07 May: Ways to prepare for the unexpected
     30 Mar: Time for a financial progress check
     10 Feb: Studying up on NZ Super
     10 Jan: Managing the back-to-school bills
     Top Stories

    RUGBY RUGBY
    Argentina crushes the Wallabies 48-17 in the Rugby Championship, All Blacks stun Springboks in Johannesburg More...


    BUSINESS BUSINESS
    A warning to Kiwi investors about the dangers of misleading cryptocurrency offers More...



     Today's News

    Environment:
    Met Service are warning of an extended period of heavy rain for the northwest of the South Island 11:49

    Soccer:
    Manchester United lose 4-0 away to Brentford to go bottom of the Premier League 11:19

    Golf:
    American JJ Spaun has a one shot lead after the third round of the opening PGA Tour playoff event in Memphis 11:09

    Tennis:
    Simona Halep has beaten American Jessica Pegula 2-6 6-3 6-4 and reach the Canadian Open WTA tennis final in Toronto 10:49

    International:
    In the Greek islands, the Antikythera shipwreck yields statues, human teeth and the missing head of Hercules 10:29

    Rugby:
    Argentina crushes the Wallabies 48-17 in the Rugby Championship, All Blacks stun Springboks in Johannesburg 10:29

    Law and Order:
    A US district attorney's office has provided an update on Salman Rushdie's injuries 10:28

    Rugby:
    All Blacks coach Ian Foster is praising the performance of his trio of inexpereinced props who helped nullify the Springboks up front in the 35-23 Rugby Championship win at Ellis Park 10:09

    Living & Travel:
    Farewell Fooey: Guardian of the ABC's PNG bureau, a friend to correspondents and an enemy of stray cats 10:09

    Motoring:
    An Auckland e-scooter rider has been tossed into the air in a horrifying crash with a car overnight 10:09


     News Search






    Power Search


    © 2022 New Zealand City Ltd