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Banking, Taxes, and Money in New Zealand

There is an array of facts that recommend a move and establishment of a new life in New Zealand. With any move to a new land, financial affairs and matters need be attended to.

Banking, Taxes and Finances in New Zealand

Source: Flickr | Aistalea

While anyone moving to New Zealand from the UK, EU, US, Canada or even Australia would find much of the system familiar, it is also true there are various complexities that need be considered. Accordingly, may the following serve as a primer for you if you plan a move to the Land of the Long White Cloud.

Banking in New Zealand

When banking in New Zealand, any Briton will find themselves feeling right at home in their day-to-day transactions. The New Zealand banking sector is deeply connected with that of its closest neighbour Australia.

Accordingly, the shared principle across the Tasman straight of a ‘four pillars’ sector - whereby four major banks serve as both strong competition against each other but also ensure ongoing security of the sector generally:

  • Australia and New Zealand National Bank
  • Auckland Savings Bank
  • Bank of New Zealand
  • WestPac Bank

Anyone of these banks shall serve your purposes for credit cards, a savings account and even a home loan, but usually only if you are resident in NZ. Yet, a number of small lenders and credit unions also exist across NZ for those who may more diverse financial affairs or who seek to avoid the rigors of red tape that can sometimes come with banking with a major lender.

Setting up a bank account in NZ

Opening a bank account in New Zealand is a relatively straightforward affairs. To start, you need have a recognised form of identification. While rules shall vary bank by bank - some for instance will accept a driver’s license - if visiting or having recently moved from overseas your passport is undoubtedly your best bet.

Bring along a couple of documents that list your current place of residence; utility bills (such as electrical or plumbing) or government notices (such as tax returns) are ideal. Further, while you need be ready to provide funds to establish a minimum opening balance - which varies bank to bank but is generally between $10-500NZD.

Accordingly, if you have been issued as Inland Revenue Department (IRD) number by the NZ tax office it is a good idea to bring this along, too. While you are able to open a bank account without one, in its absence your tax rate shall automatically be classified as the maximum 33%.

Finally, a number of banks also offer the chance to open up a NZ account before you land in the country such as WestPac Bank, ANZ, and BNZ. While this is optional, it does mean if you have wish to plan for your banking needs ahead of time, such a task can be attended to by speaking with the banks. You will then get your Eftpos (debit card) in the post.

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General fees

Unlike in the UK, where one can take money out of any UK bank cashpoint without being charged by that bank, taking money out of other banks’ cash points cost per transaction, much like the banks in the USA.

Online Banking in New Zealand

Most transactions that include physical receipts, including manual transactions and receiving statements by post, incur fees.

Sending money overseas

While in decades gone by a bank may have been your sole (safe) port of call for an international transaction, recent months and years have seen the rise of Fintech apps, offering a way in which you can securely transfer your money overseas, and do so often with a significant saving on fees percentage-wise.

While doing your own research and picking an app to your needs is ideal, Transferwise, Nat West and FairFX are each known and trusted Fintech providers and can offer an alternative for those seeking to move beyond traditional banks for their transfer needs.

Taxes in NZ

New Zealand’s tax system is one of the more efficient and straightforward in the world. Using a pay-as-you-earn system, your payslips received while working in NZ should show each time the amount of tax deducted from your salary.

Income Tax Rate
up to $14,000 10.5%
$14,001-$48,000 17.5%
$48,001-$70,000 30%
$70,001 and higher 33%

Further, while having your own business - especially one that deals in international transactions outside NZ - may require a different arrangement whereby you pay tax annually, this mode of operation should be familiar to anyone who has operated an enterprise in the UK, the US or elsewhere.

Who has to pay taxes in New Zealand

This means ensuring you’ve correctly processed all paperwork in tax season is a rather routine undertaking. To start, you are expected to pay tax if you are in NZ for more than 183 days within a 12-month period, or if you have an “ongoing relationship” with the country.

While the classification of “ongoing relationship” may sound a little complex, essentially you just need ask yourself if you own property, a business or have any other longstanding links - such as being married to a Kiwi even if you spend much of your year overseas - that would qualify as an ongoing relationship with NZ. If in any doubt, consulting an accountant is a wide idea.

Pension

To receive a pension in New Zealand, you need be either a NZ citizen or permanent resident of the nation. While this is not an arrangement that would suit someone saying in the short term, should a pension be sought and a longer stay in NZ envisioned, obtaining citizenship when you already hold a UK, US or Australian passport is generally - while still a process of considerable paperwork and planning - a reasonably easy affair.

Retiring in New Zealand from the UK

In turn, if you are already retired and wish to move to NZ from the UK, it is prudent to contact relevant authorities at home first to establish the best way for you to make the move and maintain your entitlement.

If you have relocated to NZ and are yet to retire, however - provided you retain your links to the UK and do not start receiving a pension from NZ or elsewhere - you should expect contact from the British government four months before reaching your classified retirement age.