Working Holiday in NZ: Tax Obligations for Temporary Workers (2025-26)

New Zealand is one of the most popular working holiday destinations in the world, attracting tens of thousands of temporary workers each year. Unlike Australia, which applies a special flat tax rate to working holiday makers, NZ treats you largely the same as any other worker. This guide covers the tax rules you need to know for the 2025-26 tax year.

Tax Residency: The 183-Day Rule

New Zealand determines tax residency primarily through the 183-day rule: if you are present in NZ for more than 183 days in any 12-month period, you become a New Zealand tax resident.

Most working holiday makers (WHMs) on a 12-month visa will cross this threshold. Once you are tax resident, your worldwide income is potentially taxable in NZ — though double tax agreements (see below) usually prevent actual double taxation.

If you stay fewer than 183 days, you remain a non-resident for tax purposes. Non-residents are taxed only on NZ-sourced income (your NZ wages), at the same progressive rates as residents.

In practice, whether you become tax resident or not, your NZ employment income is taxed the same way — through PAYE at standard rates.

NZ Has No Special WHM Tax Rate

This is the most important difference from Australia: New Zealand does not have a special working holiday maker tax rate. In Australia, WHMs pay a flat 15% on the first $45,000 and higher rates above that. In NZ, you pay the same progressive rates as everyone else:

Taxable Income	Rate
$0 – $15,600	10.5%
$15,601 – $48,000	17.5%
$48,001 – $70,000	30%
$70,001 – $180,000	33%
$180,001+	39%

This is generally favourable for WHMs earning typical amounts ($20,000-$40,000 during a stay), as the low 10.5% rate on the first $15,600 results in less tax than Australia’s flat 15%.

Getting an IRD Number

Before you start work, you must apply for an IRD number (New Zealand’s tax identification number). Without one, your employer is required to withhold tax at the no-notification rate of 45% — the highest possible rate.

To apply:

You need a NZ bank account first (most banks require your passport and proof of address)
Apply online at myIR or by posting an IR742 form
Processing typically takes 5-10 working days
You will receive a unique 8 or 9-digit IRD number

Start this process as soon as you arrive — ideally before you begin looking for work.

Tax Codes for Working Holiday Makers

When you start a new job, your employer will ask you to complete a Tax code declaration (IR330). The code determines how much PAYE is withheld from each pay.

Situation	Tax Code
One job only	M (primary)
Two jobs — this is the higher-paying one	M (primary)
Two jobs — this is the lower-paying one	S (secondary, flat 30%)
Two jobs — secondary pays under $14,000/year	SB (secondary, 10.5%)

Most WHMs with a single job use M. If you pick up a second casual job (e.g., hospitality on weekends), use S or SB on the lower-paying role.

Using the wrong tax code means you will either overpay or underpay tax during the year. You can sort this out at the end of the year, but it is better to get it right upfront. Use the tax code checker to confirm.

Employer PAYE Obligations

Your employer handles PAYE deductions — there is nothing special about employing a working holiday maker. They must:

Deduct PAYE income tax based on your tax code
Deduct ACC earner’s levy (1.67% in 2025-26)
File employment information with IRD each payday
Provide you with payslip details showing gross pay, PAYE, ACC, and net pay

You do not need to make any tax payments yourself while employed — it is all handled through the payroll system.

KiwiSaver: Not Auto-Enrolled, But Can Opt In

KiwiSaver is NZ’s workplace retirement savings scheme. Normally, new employees aged 18-64 are automatically enrolled. However, workers on temporary visas (including working holiday visas) are exempt from automatic enrolment.

You can still voluntarily opt in to KiwiSaver if you choose. If you do:

You contribute 3%, 4%, 6%, 8%, or 10% of your gross pay
Your employer contributes a minimum of 3%
You may be eligible for the government member tax credit (up to $260.72/year from 1 July 2025 if you contribute at least $1,042.86 — halved from $521.43 under Budget 2025)

However, there is a catch: when you leave NZ permanently, you cannot withdraw your KiwiSaver funds (except the government contributions and returns on them). Your own contributions and employer contributions are locked until you reach NZ’s retirement age of 65 — unless you apply for a permanent emigration withdrawal after being overseas for at least 12 months.

For most WHMs, opting into KiwiSaver is not recommended due to the withdrawal restrictions.

Worked Example: Typical WHM Earnings

Lucas is a 25-year-old from Germany on a 12-month working holiday visa. He works in hospitality earning $25/hour, averaging 30 hours per week for 6 months (26 weeks).

Gross earnings: $25 x 30 x 26 = $19,500
Tax code: M (single job)

Tax calculation:

Bracket	Rate	Taxable Amount	Tax
$0 – $15,600	10.5%	$15,600	$1,638.00
$15,601 – $19,500	17.5%	$3,900	$682.50
Total		$19,500	$2,320.50

Other deductions:

ACC earner’s levy: $19,500 x 1.67% = $325.65
KiwiSaver: not enrolled (temporary visa)

Summary:

Item	Amount
Gross earnings	$19,500.00
PAYE tax	$2,320.50
ACC levy	$325.65
Net take-home	$16,853.85
Effective tax rate	11.9%
Weekly take-home (over 26 weeks)	$648.23

Lucas can verify this using the take-home pay calculator or PAYE calculator.

Tax on Common WHM Income Levels

The following table shows approximate annual tax for common working holiday income levels (single job, M tax code, 2025-26 rates):

Annual Gross Income	PAYE Tax	ACC Levy	Net Income	Effective Rate
$10,000	$1,050	$167	$8,783	10.5%
$20,000	$2,408	$334	$17,258	12.0%
$30,000	$4,158	$501	$25,341	13.9%
$40,000	$5,908	$668	$33,424	14.8%

Note: these figures do not include the Independent Earner Tax Credit (IETC), which may reduce tax slightly for incomes between $24,000 and $48,000.

Leaving NZ: Tax Refund and Filing

When you leave New Zealand, check whether you are owed a tax refund. Common reasons WHMs overpay tax:

Working only part of the year: PAYE is calculated as if you will earn that amount all year. If you work 6 months and earn $20,000, your employer withholds tax as though your annual income is $40,000 — resulting in overpayment.
Wrong tax code: If you were taxed at the S (secondary) rate when M was correct, you will have overpaid.

IRD automatically performs an income tax assessment after 31 March (the end of the NZ tax year). If you are owed a refund, it will be calculated and issued — usually deposited to your NZ bank account. You can also file an IR3 individual tax return through myIR to trigger the assessment earlier.

Keep your NZ bank account open until you receive any refund. If your account is closed, IRD can issue a cheque to an overseas address, but this takes longer.

Double Tax Agreements

New Zealand has double tax agreements (DTAs) with over 40 countries, including the UK, Germany, France, USA, Canada, Japan, South Korea, and most EU nations. These agreements ensure you are not taxed twice on the same income.

In practice, for WHMs:

Your NZ employment income is taxed in NZ (where the work is performed)
When you file a tax return in your home country, you claim a foreign tax credit for the NZ tax already paid
This means you typically owe little or no additional tax at home on your NZ earnings (unless your home country’s rates are significantly higher)

Check whether your home country has a DTA with NZ on the IRD website.

Key Takeaways

NZ has no special working holiday maker tax rate — you pay the same progressive rates as residents
Get your IRD number before starting work to avoid the 45% no-notification withholding rate
Use tax code M if you have one job, S on a second lower-paying job
KiwiSaver auto-enrolment does not apply to temporary visa holders — and opting in is usually not worthwhile due to withdrawal restrictions
A typical WHM earning $19,500 over 6 months pays roughly 11.9% effective tax
You may be owed a tax refund if you only worked part of the year — IRD will assess this automatically after 31 March
Double tax agreements prevent being taxed twice — claim a foreign tax credit in your home country
Use the take-home pay calculator or income tax calculator to estimate your NZ tax