Tax - Income distributions of individual customers 2019

Inland Revenue

Definitions

Taxable income for individuals: income on which personal income tax is assessed for the March year. For people with IR3 tax returns or Personal tax summaries, this is income from all taxable sources less allowable deductions and losses. People with negative income because of losses are recorded as having nil taxable income in the tables.

Data calculation/treatment

Up until 2018, for people who are non-filers, taxable income was assumed to be (limited to) their total PAYE gross earnings in the year ended 31 March.
This calculation did not include interest, dividends, KiwiSaver, or other PIE earnings. From 2019, these income streams are included (although for PIEs it is only if the PIE income was taxed at the wrong rate).
From 2019, the inclusion of additional people with passive-only income such as interest, dividend, and PIE income will have changed the overall distribution by introducing more low income earners, particularly children. Moreover, other people will now have bigger incomes through the inclusion of additional income streams from their investments. This is particularly true of people who did not previously file a tax return or receive a personal tax summary.

Limitations of the data

The data is based on a random sample and has been scaled up to population estimates. The sample is 2% of wage and salary earners, and 10% of IR3 filers.

Inclusions

The following people are included in the dataset:
- anyone who filed an IR3 personal tax return for that income year, even if they filed a nil return or a loss
- anyone who paid PAYE via an employer, including recipients of taxable welfare benefits, New Zealand Superannuation, earnings-related accident compensation income, student allowances, and paid parental leave, even if they did not file a return.
- anyone who received an automatic income tax assessment at year end. From 2019, these are created for anybody with income during the year from any source for which Inland Revenue holds information; for example wages and salaries, taxable welfare benefits and transfers, interest, dividends, and income earned through portfolio investment entities (PIEs) if it was taxed at the wrong rate.
- People whose only income was from interest, dividends, or PIEs, all fully taxed at source so they did not, prior to 2019, need to file a tax return (included by way of automatic assessment)
- Children (included if they filed or had automatic assessment income)
- People with part year income (included if they filed or had automatic assessment income)

Exclusions

The following people are not included:
- people with no taxable income and who did not file a tax return

Changes to data collection/processing

There has been a structural break in the coverage of this data from the 2018/19 income year. The effect has been to increase the number of people covered by the data, particularly those who earn only passive income.

Data provided by

Inland Revenue

Dataset name

Tax Statistics: Income distribution of individual customers 2019

Webpage:

https://www.ird.govt.nz/about-us/tax-statistics/revenue-refunds/income-distribution

How to find the data

At URL provided, select 'Income distributions of individual customers 2001 to 2019' Excel file. Figure.NZ calculated the $5000 bands for the year 2019.

Import & extraction details

File as imported: Tax Statistics: Income distribution of individual customers 2019

From the dataset Tax Statistics: Income distribution of individual customers 2019, this data was extracted:

  • Sheet: 2019 at Sept 2020 for extractio
  • Range: N6:P67
  • Provided: 186 data points

About this dataset

Income distributions of individual customers show estimates of the number of individuals in bands of taxable income. It also shows aggregate taxable income and income tax for people in each income band.

Method of collection/Data provider

The income and tax information is derived from IR3 tax returns, personal tax summaries (to 2018), automatic income tax assessments (form 2019) and employer PAYE information.