It is always a good idea for the expat to check the requirements for opening a bank account in their adoptive country as soon as possible. Thanks to recent developments, it is now possible to open an account in certain banks before flying out. This has many benefits compared to opening one upon arrival. For one, you don’t have to personally visit the bank of your choice and prove your identity. So, weigh your options well to know which bank is best for you and where to open your account.

The sooner you familiarize yourself with New Zealand’s banking and tax system, the sooner you will get your finances in order.

How to Open a Bank Account in New Zealand

Opening a bank account in New Zealand is quite painless. The process is pretty straightforward for a non-resident. It is advisable to open a New Zealand bank account from overseas before you move. It costs less to transfer the funds from overseas to your new account, than to do it in New Zealand. You only need to visit a branch upon arrival to activate your account.

As a foreigner, you can open a bank account in New Zealand if you have a visa that allows you to stay in the country for some time—this could be a work, residence, or student visa.

EFTPOS Cards and Debit Cards: What is the Difference?

Electronic Funds Transfer at Point of Sale (EFTPOS) cards are similar to debit cards, as they both use funds from your existing bank account. However, EFTPOS is a payment system native to Australia and New Zealand only, which means you would have difficulty using it outside of these countries.

Another difference is that EFTPOS cards do not let you pay online. It also has no contactless option either. The advantage of these cards is that they are free of charge.

Requirements to Open a Bank Account as a Non-Resident

A permanent local address is required to secure a bank account in the country. You may only activate an account opened overseas once you secure a residence permit.

As a non-resident, opening an account in New Zealand would require:
– Proof of identity either with a New Zealand ID or your passport;
– Proof of address: this could be your current address overseas, but you will eventually need to provide a permanent address in New Zealand;
– A New Zealand IRD number (you may use your tax number or tax declaration from your country of origin until you acquire one;
– Your visa: either a work, residence, or student visa.

Opening an Account from Overseas

Depending on the agreement with your bank, opening an account from overseas makes bank transfers and other payments easier. It also makes the process of getting your first paycheck relatively painless. So, prioritize a visit to the nearest branch as soon as you acquire a residence permit.

Please give your bank at least ten days to process your overseas account request.

Best Banks and Bank Accounts for Expats in New Zealand

Some of the best banks in the country are: ANZ, ASB Bank, BNZ Bank, Kiwibank, and Westpac. These big banks offer the best online banking options and zero-fee bank accounts.

You will find that these banks offer zero-fee banking options, but actually still charge 15 NZD (9 USD) for transferring your money from your current account abroad to your new account.

Another banking option for the expat is looking into credit unions and building societies. Although these are not considered banks in the traditional sense, they are still supervised by the Reserve Bank of New Zealand, where all other banks are registered.

International Banks in New Zealand

The following international or foreign banks are to be found in New Zealand:
– Banque Nationale de Paris
– Barclays
– Citibank, N.A.
– Deutsche Bank AG
– The Bank of Tokyo-Mitsubishi UFJ
For a complete list of all the banks registered in New Zealand, please refer to the Reserve Bank of New Zealand website.

Some fees from which you will not be able to avoid:
– Having a New Zealand account means you will typically pay fees overseas for using ATMs and EFTPOS facilities.
– Setting up an automatic payment scheme lets you pay a one-time fee for the alteration of service.
– You may be charged accordingly once your bank fails to process one of your cheques or electronic payments.

Most banking options have no minimum deposit requirements. However, in some banks, a minimum deposit could go anywhere from 100 to 1,000 NZD (62 to 6223 USD)

What is the Tax System in New Zealand?

Generally speaking, you don’t need to file a tax return every year in New Zealand. In rare cases where you may have to, you will be given a notification from the Inland Revenue Department (IRD).

The tax system in New Zealand is quite simple compared to many countries. It is mostly based on personal income tax and Goods and Services Tax (GST). New Zealand does not have inheritance taxes, local or state taxes, payroll taxes (taxes on salary), social security taxes, general capital gains (except for specific investments), or even healthcare taxes (except for a low levy for the ACC).

In certain cases that you have to file a tax return (expats will typically need to in their first year, or when they arrive in the middle of the tax year), the Inland Revenue Department (IRD) will notify you.

More on New Zealand taxes can be found on the Inland Revenue website.

IRD: New Zealand’s Tax Number and How to Apply

Paying taxes in New Zealand means getting an IRD number. Once you have gathered all the required documents, you may apply either online or in person and wait to receive your IRD. You can complete the online application form or its physical counterpart (form IR742) in New Zealand post offices (PostShops).

To apply for an IRD on a residence visa, you will need:
– Your passport details
– the Immigration Application Number (which can be found on the visa approval letter from Immigration New Zealand)

If you have a work visa, you will also need:
– Your most recent tax number from overseas (if it applies)
– Proof of having a bank account in New Zealand, containing your name and account number

These are the corresponding rates for the different types of taxes in New Zealand:

– Personal income: Progressive rate tax brackets apply (from 10.5 to 33%)
– Company income: Applies 28% rate
– Tax credits: “Working for Families” credits granted for low- and middle-income earners.
– Accident Compensation Corporation (ACC): Applies 1.39% rate up to a maximum of 126,286 NZD (78,650 USD) in earnings.
– Capital gains: Only applies to foreign debt and equity investments.
– Dividends: Imputation system is in place to avoid double taxation.
– Tax on savings: Little tax relief on contributions to New Zealand retirement schemes, but saving is not compulsory. Taxes are paid at normal income levels at source, but distributions are tax free. – There are no mortgage interest tax benefits, except for investment property.
– Fringe Benefit Tax (FBT): Paid by employers; goes up to 49.25%.
– Sales & Excise Tax: Goods and Services Tax (GST) of 15% applies to most things. Excise tax is paid on petrol, tobacco, alcohol.
– Other: Motorists pay a levy with their annual car registration. Employers pay insurance coverage based on industry risk.

Income tax in New Zealand: Tax Codes and Tax Rates

Income in New Zealand is taxed on a pay-as-you-earn basis. If you do not have an IRD (New Zealand’s tax number), you will be paying tax at the highest rate. Taxes apply to the following types of income: – Salary and wages – Compensation by the ACC for the loss of earnings – Some bonus payments, which are taxed differently depending on whether you receive them in a lump sum or in regular payments – Allowances, given to you by an employer for travel, accommodation or relocation costs. – Payment for jobs done in New Zealand for overseas employers There are two types of tax computations based on your financial situation: – Tax Code– This is computed based on the income you receive including your secondary income. Whether or not you have student loans will also be considered. Employers will follow the taxcode to know how much to deduct from your salary. If you don’t give your employer the correct category that you fall into, you will be charged the highest category or the non-declaration code of 45%. – Tax Rate– Tax rates are computed based on your yearly income. This is the standard income tax rate table in New Zealand:

Self-employed workers are taxed as individuals and you only pay your taxes on net profit by filing a tax return at the end of the year. If you do earn more than 60,000 NZD (37,367 USD) annually, then you have to register for Goods and Services Tax. Examples of self-employed workers are: contractors, freelancers, sole traders and small business owners. For you to files your taxes accurately, please ensure to: – Keep records – Claim your expenses – Charge GST if you needed To file your income tax as self-employed, do create an account at myIR and have these documents ready: – Your IRD number – Details of your income for the current year – Details of expenses you wish to claim If in addition to your freelance income, you earn from other sources do prepare the following: – details about any untaxed income such as from your business, rental property or overseas. – property sale information (form IR833) for any income from a taxable property sale. – details about any adjustments to your income if you received Working for Families payments or have a student loan. If you run a business, do remember that your net income will be taxed. It is typical that on your first year, taxes must be paid lump sum, but for the succeeding years, they can be paid in installments. Business tax rates are as follows: – Self-employed: tax rate for individuals – Most companies: 28% – Non-profit organizations: 28% Trust and trustees (initial amount of money put into a trust): None Trust (any income the trust earns): 33%