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Thread: Pick your salary carefully!!!

  1. #1
    Taffy's Avatar
    Taffy is offline He who shall be ignored
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    Default Pick your salary carefully!!!

    Be careful with tax bands when it comes to choosing your salary!

    Here's what happens to your cash....

    Pay: Tax: Income:

    $38000 - 19.5% - $30590 take home per year
    $39000 - 33% - $26130
    $40000 - 33% - $26800

    and so on up to:

    $46000 - 33% - $30820

    So for an extra $8000 a year on your salary, you take home a massive $230 extra per year, or $4.42 a week! The tax system gobbles up the extra $8000, or approx. $153 per WEEK!

    The band changes from 19.5% to 33% at $38000, so eveything between $38000 and $46000 means you actual earn substantially LESS!!

    No wonder some people end up struggling quite badly....
    Taffy

    The greatest mistake you can make in life is to be continually fearing you will make one.

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    SteveyC's Avatar
    SteveyC is offline Right Royal Pain In The Posterior
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    Default Pick your salary carefully!!!

    Wow thats cast iron yes? Surely theres a serious flaw there. Are there any other benefits you gain from being in certain wage brackets. Doctors fees/school fees, anything?
    Basically anything above 38k is not worth it, unless it's also above 46k right?

    Crazy!!! :icon_lol:
    Kind of funky in a quirky kiwi way tho, odd sentement I know hehe

  3. #3
    Taffy's Avatar
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    Default Pick your salary carefully!!!

    It's no different from the UK tax system really, which also has tax bands, but when you see people who are giving up on NZ and going home due to struggling financially, even though they are earning $45,000 a year, you can see why!

    There are no benefits of being on a higher tax bracket. All fees remain the same. I expect people dont do so badly when they start claiming the tax benefits, but as far as I am aware this is not an option for new immigrants, so you are stuck with it for at least 2 years.

    Make no mistake, unless you have plenty of cash behind you when you get here, the first 2 years will be a struggle with money as you find your feet and get used to budgeting kiwi style.

    Of course, everyone who claims NZ is too expensive to live in, and is impossible to make a go of, need to think how kiwis themselves manage. After all, they cant just up sticks and 'go home' when cash gets tight. 4 million people manage day to day, so it must be possible!!

    I think the people that suffer the most in the transition from home to NZ are the ones on a very good salary back home. You'll rarely, if ever, get the same lifestyle when it comes to material things and 'living it up' as the money just isnt available in such a small economy.

    I've said it before, and I'll say it again... New Zealand is pure and simply a lifestyle choice. In my book, health is more important than money, and if being stressed out every day, having no time for your family and dropping dead at 50 because of it all, just for a shoe box in a 'posh' area to go with your high salary, is your ideal, stay where you are! If you want less stress, more time for your family, life in a friendly atmosphere surrounded by wide open spaces and are prepared to do with the finer things in life, it's NZ all the way....

    House and car - functional items
    Health and Happiness - essential!
    Taffy

    The greatest mistake you can make in life is to be continually fearing you will make one.

  4. #4
    netchicken is offline Senior Member
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    Default Pick your salary carefully!!!

    Taffy youa re describing "middle class poverty".
    It gets worse, people on lower incomes get medical, schooling etc discounts.

    You can see how the blatent appeal to personal greed by the National party offering tax cuts initially went down so well... but now they can't offer up their way of doing it, the polls have backed off again.

    Actually with the elections coming up, issues like this might be interesting for people who are immigrating, to know what is stirring the kiwi psyche, and what the parties represent.

    There are many undercurents, such as complaints about the destruction of the family focused society, that people may never hear of.

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    Taffy's Avatar
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    Default Pick your salary carefully!!!

    I've been following the election stuff on the TV. Everyone seems to want to throw money at the populous, without actually having the money to pay for it all.

    I must admit, it's quite scary watching what these people are promising!
    Taffy

    The greatest mistake you can make in life is to be continually fearing you will make one.

  6. #6
    AndyA is offline Junior Member
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    Default Pick your salary carefully!!!

    Hi Taffy, I think there is a fundamental flaw in the logic here, take a look at this link http://www.ird.govt.nz/how-to/taxrat...etaxrates.html

    i.e. you are taxed at 19.5% on the first $38000
    You are the taxed at 33% on any thing over that up to the next band so if you earned $39000

    $38000 - 19.5% - $30590 take home per year
    then the next 1000 is taxed at 33% = $31260 not $26130
    That's my take on it. If I'm wrong then please correct me quickly !! :icon_neutral:

    Regards Andy

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    Taffy's Avatar
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    Default Pick your salary carefully!!!

    Well, I think (and hope!) you're right.

    The table at the top of the page states the taxable income for every dollar earned, but the examples below that break down the income in to brackets, making out as you stated, that the tax rate changes only for income earned over the basic amount.

    Thanks for finding that info, that's put my mind (and probably a few others) at rest! All the info I could find for tax rates made out as I put above, so I'd better look harder next time :icon_biggrin:
    Taffy

    The greatest mistake you can make in life is to be continually fearing you will make one.

  8. #8
    BruceampGill is offline Member
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    Default Taxable Salary !!

    I agree with Andy. This is the way the tax works back here in the UK so I cant imagine it would be as severe as 33% for the entire amount... it simply would not be worth working for a larger salary.

    Im no expert mind you but, fingers crossed.

    Can anyone positively confirm the situation ?

    Bruce

  9. #9
    Natalie123 is offline Junior Member
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    Default Pick your salary carefully!!!

    Yes it is correct that the first $38,000 @ 19.5%, then you are taxed at 33% up tp $60,000, then 39% over ?60,000. In this way it works similar to the UK system.

    http://www.ird.govt.nz/income-tax-in...etaxrates.html

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