Either someone else takes tax out of your income on your behalf or you pay the tax yourself.
If someone else takes tax out of your income they pass the tax on to us on your behalf. They then pay you.
Common examples of this are:
- your employer taking tax out of your wages or salary
- Work and Income taking tax out of your benefit
- your payer taking tax out of your schedular payments
- your bank taking tax out of the interest you earn.
If you pay tax yourself you work out how much you need to pay at the end of the tax year (31 March) and pay the tax directly to us.
Common examples of this are people who:
- are self-employed
- earn money from rental income
- earn money from overseas.
Some of your income might get taxed in one way and some in the other way.