Banking & Finance

Banking and Finance in New Zealand

New Zealand has a modern, well-regulated banking system. Setting up your finances early is important for smooth transition.

IRD Number - First Priority

IRD (Inland Revenue Department) Number is essential for:

• Opening bank accounts
• Employment
• Paying taxes
• Accessing government services

How to Get:

• Apply online at ird.govt.nz
• In person at local IRD office
• Usually takes 8-10 business days
• Need passport and visa documentation

Critical: Get IRD number within first week of arrival

Opening a Bank Account

Major Banks:

• ANZ (Australia and New Zealand Banking Group)
• BNZ (Bank of New Zealand)
• ASB (formerly Auckland Savings Bank)
• Westpac
• Kiwibank (NZ-owned, postal banking)

Requirements:

• IRD number
• Valid passport
• Proof of address (utility bill, rental agreement)
• Work visa or residence documentation
• Initial deposit (amount varies)

Process:

• Can start application online before arrival
• Complete in person at branch
• Account usually active within days

Types of Accounts:

• Everyday/transaction account (for daily expenses)
• Savings account (earn interest)
• Term deposits (fixed-term higher interest)

Banking Costs and Features

Fees: Many banks offer fee-free accounts for online banking. Some charge monthly fees ($5-15) for full-service accounts.

EFTPOS: Debit card standard - widely accepted. Can get "cash out" at supermarkets when making purchases.

Credit Cards:

• Require NZ credit history
• New arrivals may need to start with lower limits
• Typical interest rates: 12-22% APR

Online Banking: Excellent. All major banks have robust online and mobile banking.

International Transfers:

• Banks charge fees for international transfers
• Wise (formerly TransferWise), OFX, and WorldRemit offer better rates
• Receiving international transfers can incur fees

Tax System

Tax Residency: If in New Zealand for more than 183 days in any 12-month period, you're tax resident. Tax residents are taxed on worldwide income.

Tax Rates (2026): Progressive system

• 10.5% on first NZD $15,600
• 17.5% on $15,601-$53,500
• 30% on $53,501-$78,100
• 33% on $78,101-$180,000
• 39% on income above $180,000

ACC Levy: 1.67% of income (capped at $2,551.59 annually) for ACC earner coverage

GST: 15% Goods and Services Tax on most purchases (already included in displayed prices)

PAYE: Pay As You Earn - employers withhold tax from wages

Transitional Resident Status

Major Benefit for New Migrants: If you're a new migrant, you may not have to pay tax on most overseas income for your first 4 years in New Zealand. This means you may only pay income tax on what you earn in NZ.

Eligibility:

• New to New Zealand or returning after extended absence
• Haven't been tax resident in past 10 years
• Meet specific criteria

What It Covers:

• Foreign-sourced income (dividends, interest, rent from overseas)
• Still pay tax on NZ employment income
• Significant tax advantage for high net worth individuals

Tax Filing

Fiscal Year: 1 April - 31 March

Filing Deadline: 7 July for most individual returns (IR3)

Who Must File:

• Self-employed individuals
• Those with untaxed or overseas income
• Those claiming expenses or rebates

Employees on PAYE: Often don't need to file if only employment income

KiwiSaver - Retirement Savings

What It Is: Voluntary retirement savings scheme with employer contributions

How It Works:

• Employee contributes 3%, 4%, 6%, 8%, or 10% of gross salary
• Employer contributes minimum 3%
• Government may add member tax credit (up to $521.43 annually)

Eligibility:

• NZ citizens and permanent residents
• Some temporary visa holders if meet criteria

Benefits:

• Compound growth over time
• Employer contributions are "free money"
• Can withdraw for first home (after 3 years) or at retirement age (65)

For New Residents: Strongly consider joining KiwiSaver - employer contribution alone makes it worthwhile

Building Credit History

Credit scores less emphasized than in USA, but still relevant for:

• Mortgages
• Higher credit card limits
• Some rental applications

Start Building:

• Pay all bills on time
• Get credit card and pay off monthly
• Utilities in your name with consistent payments
• Mobile phone contracts

For US Expats

FATCA: US citizens must report foreign financial accounts if aggregate value exceeds $10,000.

Tax Treaties: NZ-US tax treaty prevents double taxation but US citizens still must file US returns.

Recommendation: Consult expat tax specialist for US obligations