Keyword: Annualization
Although IRD deducts tax weekly, it assumes that “Your weekly earnings × 52 weeks = Your annual salary”.
Tax Refund Simulation:
1. High-Income Week (Earning $1,500)
The system miscalculates your annual salary as $78,000 → That week is directly taxed at a 30% high tax rate.
2. Reality (Worked only 3 months)
Your actual total income for the year might only be $18,000 → You should only be applied a 17.5% tax rate.
3. Result (Refund)
A tax refund is simply returning the overpaid money to you.
(Although the actual tax calculation is more complex than “x52 weeks”, knowing the estimate is enough)
Total Income $12,000
Total Deductions $2,400
(Incl. ACC $200)
Estimated Total Refund
$940
Tax Bracket Refund +$940
Due to weekly PAYE withholding based on an estimated annual salary higher than your actual year-end total.
IETC Government Credit +$0
(Resident condition (183 days) not met)
