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.
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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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.
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.
|up to $14,000||10.5%|
|$70,001 and higher||33%|