nz_lump_sum_tax_calculator
Tax on a New Zealand redundancy or lump sum, by IRD's rate table.
Use for: 'how much tax on my redundancy', 'what will I get from a $40,000
redundancy payment', 'is redundancy taxed differently', 'tax on a
retirement payment', checking a redundancy letter.
TWO RULES MAKE REDUNDANCY DIFFERENT AND BOTH ARE EASY TO MISS. Redundancy
and retirement payments carry NO ACC earner levy, so they always take the
lower rate column whatever the income, and NO KiwiSaver is deducted from
them at all. Treating a redundancy like a bonus overstates the deductions
twice over. Pass payment_type correctly.
This applies IRD's published rate TABLE, where annualised income plus the
lump sum picks one flat rate charged on the whole payment. That is what an
employer deducts on the day. nz_bonus_tax_calculator computes the same tax
the exact way instead, which is roughly where the year-end assessment
lands. Both are right; they give different answers. Use this one to check a
letter or a payslip, and say which method you used.
ALWAYS ask for the annual salary. It selects the rate, so the answer
depends on it entirely.
Args:
lump_sum: The gross lump sum in NZD.
annual_salary: Annual salary, used as the annualised income.
payment_type: redundancy, retirement, bonus, commission, holiday_pay,
exit_inducement or back_pay.
kiwisaver_rate: A DECIMAL. Forced to zero for redundancy and retirement.
has_student_loan: Whether 12% comes off the lump sum.
Returns:
The rate selected with why_that_rate explaining which row and why, the
PAYE, other deductions, and the net amount received.
Input Schema
TableJSON Schema
| Name | Required | Description | Default |
|---|---|---|---|
| lump_sum | Yes | ||
| payment_type | No | redundancy | |
| annual_salary | Yes | ||
| kiwisaver_rate | No | ||
| has_student_loan | No |