According to MBIE, Every year, more than 100,000 New Zealanders are made redundant and laid off, or have to stop working because of a health condition or disability.
Redundancy will likely affect your income for the financial year. It can affect your income tax, working for families tax credits entitlements, Kiwisaver, student loan and child support.
In this blog, we will look at how your income tax may be affected. You can find additional information for other situations here on Inland Revenue’s website.
A redundancy payment is taxable income, so you need to pay income tax on it. Your employer should deduct the tax and pay it on your behalf. If they do not, then you will be responsible for paying that tax yourself.
If you are made redundant during the tax year, it may turn out that you have paid too much tax and are due a refund or you have not paid enough tax and have some more to pay.
Inland Revenue can assist you if you are unable to pay your tax bill in full.
We are here to help you figure out what options may be best in your case – contact us via email accounting@ebp.co.nz or phone 09 470 1840.
