Kia ora! If you’re planning a working holiday in New Zealand, one of the first things you’ll need to sort out is your financial setup. Although this is likely the least exciting part of your NZ experience, it’s integral for receiving wages, managing finances, and paying taxes. This guide will walk you through three crucial aspects of financial life in New Zealand: opening a bank account, obtaining an IRD number, and understanding your tax obligations.
Opening a Bank Account in New Zealand
Opening a New Zealand bank account is an important first step for working holidaymakers. You’ll need it to receive your wages, pay bills, and handle day-to-day transactions. Although some employers may allow you to receive your first paycheck in cash or via an overseas account, having a local bank account is necessary for receiving your IRD, which is needed for tax purposes. Without an IRD, your income will be taxed at the highest rate of 46.7%!
Requirement for Opening a Bank Account in New Zealand
These requirements may vary, so be sure to double-check with your new bank, but typically the following are necessary:
- Proof of Identification – Your passport serves as a valid form of ID in New Zealand.
- Copy of Your Visa – Some banks may require a copy of your visa for verification. Have a printed copy on hand or show the visa in your passport if it has been physically stamped.
- Proof of Address – A New Zealand address is required. Some hostels offer a service to provide proof of address for backpackers, sometimes charging a small fee to print the document. However, not all banks accept this, so check in advance.
- Overseas Tax Identification Number – This varies by country and may be called a national identity number, social security number, personal tax number, or equivalent.
Choosing a Bank in New Zealand
New Zealand has five major banks, each offering accounts suited for newcomers and working holidaymakers:
- ANZ (www.anz.co.nz) – One of New Zealand’s largest banks, with an extensive branch network. There are no monthly/annual fees for their Visa debit card, and you can apply online for a bank account and verify in person.
- ASB (www.asb.co.nz) – Offers a quick online application process that can be completed abroad. no monthly base or transaction fees and offers an ASB Visa Debit card with no annual card fee.
- BNZ (www.bnz.co.nz) – Apply online and verify the account in person. There are no monthly account fees, no transaction fees, and unlimited withdrawals. Debit cards are also available available.
- Westpac (www.westpac.co.nz) – Account opening can be 100% completed online with either RealMe or Westpac EasyID. No monthly fees and a free MasterCard for the first year.
- Kiwibank (www.westpac.co.nz) – Account can be completed online or at a branch in person. Visa debit cards are available for $10 per card per annum (waived for the first year of the first card).
Another option that is gaining in popularity is a borderless bank account. The most used of these is Wise (Formerly Transferwise). This option can be good for those who plan to work in multiple counties, as you are not required to provide proof of address. In addition, this service allows you to hold your money in different currencies and transfer between those currencies for a low fee. Opening an account is completely online, so can be completed prior to arriving in New Zealand.
Opening a Bank Account Before Arrival
If you prefer to set up your account in advance, many banks allow you to start the process online. You can fill out an application on their website and provide scanned copies of your identification and visa details. Some banks will let you deposit money into your account before arriving, but you may need to visit a local branch in person to complete the verification process before you can withdraw funds or fully activate your account.
Opening a Bank Account After Arrival
If you choose to open your account once you’re in New Zealand, the process is fairly straightforward. You’ll need to visit a bank branch with the following documents:
- Your passport (as proof of identity)
- Your visa details (to confirm your legal right to work)
- Proof of a New Zealand address (a rental agreement, a letter from your hostel, or a utility bill in your name)
Some banks may require additional verification, so it’s a good idea to check ahead of time and see what documents you need. Once your account is open, you should immediately receive an EFTPOS (Electronic Funds Transfer at Point of Sale) card. A debit card usually arrives shortly thereafter by mail or in-person pick-up.
Getting an IRD Number in New Zealand
An IRD number is your unique tax identification number in New Zealand. Without it, your employer will deduct tax at the highest rate, which is significantly more than necessary. Getting an IRD number ensures that you’re taxed correctly and that you won’t overpay.
Why You Need an IRD Number
Every employer in New Zealand is required to deduct tax from your wages under the Pay As You Earn (PAYE) system. Your IRD number allows them to calculate your tax at the correct rate. It’s also needed for things like filing a tax return, opening certain bank accounts, and applying for government services.
How to Apply for an IRD Number
The process for applying for an IRD number is simple and can be done online through New Zealand’s Inland Revenue Department (IRD) website. Here’s what you’ll need:
- photo identification (ID), such as a passport
- proof of address, for example, a letter from your utility company
- tax identification number from your country or territory
- proof of the reason for applying for an IRD number, for example, working here or buying property here
- a fully functioning New Zealand bank account or Customer due diligence - IR997 form.
Once you have these documents, you can submit your application online. If everything is in order, you’ll typically receive your IRD number via email or text within 10 working days.
Understanding Taxes in New Zealand
New Zealand has a progressive tax system, meaning that the more you earn, the higher the percentage of tax you pay. As a working holidaymaker, you’ll likely fall into the lower tax brackets, but it’s still important to understand how taxation works.
How Your Tax is Paid
New Zealand uses a PAYE (Pay As You Earn) system, where tax is deducted from your paycheck before you receive it. This means you generally won’t need to worry about filing tax returns unless you believe you’ve been overtaxed or have income from multiple sources.
Income Tax Rates for Individuals (From 1 April 2025)
- 10.5% for income up to NZD 15,600
- 17.5% for income from NZD 15,601 to NZD 53,500
- 30% for income from NZD 53,501 to NZD 78,10
- 33% for income from NZD 78,101 to NZD 180,000
- 39% for income over NZD 180,000
Most working holidaymakers will earn under NZD 48,000 annually, meaning they will pay between 10.5% and 17.5% in tax.
End-of-Year Tax and Refunds
New Zealand’s tax year runs from April 1 to March 31. If you’ve worked multiple jobs, overpaid taxes, or left the country before the tax year ends, you might be eligible for a tax refund. You can check your tax status and apply for a refund through the myIR portal on the IRD website.