Year-end tax refund or bill in NZ: why and what to do

After each tax year ends on 31 March, Inland Revenue checks whether the PAYE taken during the year matches the tax actually due on your total income. If you only earn wages, salary or already-taxed investment income, it does this automatically, issuing assessments from the last weekend in May into June and July. A refund is paid to your bank account; a bill of $50 or less is usually written off, and a larger one is due by 7 February the following year.

How the year-end check works

PAYE is an estimate made one payday at a time. Your employer looks at one pay period, assumes you earn the same all year, and deducts tax on that basis. Your real tax is set on your whole year's income, so the two rarely match to the cent.

Automatic income tax assessments go to people whose only income is "salary, wages or investment income that's already taxed": for example interest, dividends, KiwiSaver, NZ Super and income-tested benefits. If you also have self-employed, schedular or rental income, you file an IR3 return instead (see becoming a contractor).

The timetable, from IRD:

• "We'll start issuing income tax assessments from the last weekend in May, and continue into June and July."
• Refunds are paid into your bank account from late May to the end of July as assessments are processed, usually arriving within a few days.
• For the 2026/27 tax year (1 April 2026 to 31 March 2027), that means assessments from late May 2027.

"Your income tax assessment will show if you've paid the right amount of tax, if you are due a refund or if you have more tax to pay." A refund is not a reward and a bill is not a penalty: both usually come from tax codes and the shape of your income during the year.

The common causes of a refund or a bill

IRD's own list on refunds and tax bills is short: your income changed during the year, you were on the wrong tax code, or the tax rate or PIR on your investments changed partway through. In practice these are the situations behind most of them:

• A second job on the wrong secondary code. SB, S, SH, ST and SA each take one flat rate from every dollar of the second job. Choose a band too high and you are over-taxed; too low and you get a bill. The band is set by your total income from all jobs.
• Working part of the year. If you started work in October, or took unpaid leave, each payday was taxed as if it continued all year. That usually means too much tax and a refund.
• A bonus taxed at the extra pay rate. Lump sums are taxed at one rate worked out from your last four weeks' pay times 13, plus the bonus. That can overshoot or undershoot your real annual tax.
• The independent earner tax credit (IETC). If you were eligible but not on ME, the credit of up to $520 comes back as a refund. If you were on ME but your income ended up above $70,000, or you or your partner got Working for Families, or you got NZ Super or a benefit, it is clawed back as a bill.
• The wrong main code. For example M when you have a student loan, or ND (45% plus ACC levy) because you never gave your employer an IR330.
• Investment income at the wrong RWT rate or PIR.
• An extra pay period: a 27th fortnightly or 53rd weekly payday in the year.

Worked example: a second job on the wrong code

Mere earns $40,000 a year in her main job on code M. She also works a weekend job paying $150 a week, $7,800 over the 2026/27 year. Her total income is $47,800, which sits in the 17.5% band ($15,601 to $53,500), so the right secondary code is S. She ticked SH by mistake.

The correct tax on that $7,800, on top of her $40,000, is 17.5% of every dollar: $1,365.00. On SH she paid $2,340.00 of income tax, so about $975 too much. Her main job on M deducted $5,907.72 of income tax against a true $5,908.00 on $40,000, so it is only cents out. Her assessment in late May 2027 should show a refund of close to $975. Had she used S, the year would have balanced almost exactly.

The reverse happens too. Someone earning $45,000 in a main job and $10,000 in a second job who chooses SB (10.5% tax) has $1,050.00 of income tax deducted from the second job. The true tax on that $10,000 is $1,937.50, because it straddles the 17.5% and 30% bands, so the year ends with a bill of $887.50: too large to be written off. Our secondary tax calculator and the guide to two jobs and tailored tax codes show how to pick the right band.

Worked example: a bonus taxed at the extra pay rate

Tom earns $48,000 a year, paid fortnightly: $1,846.15 a fortnight in 2026/27, with $313.36 PAYE on code M. In March he gets an $8,000 bonus.

His employer follows IRD's extra pay rule (IR335): the last four weeks' pay times 13, plus the bonus, comes to $55,999. That is in the 30% band, so the whole bonus is taxed at 30% plus the 1.75% ACC levy.

The correct figure is lower because Tom's total income for the year is $56,000: the first $5,500 of the bonus fills the 17.5% band up to $53,500, and only the last $2,500 is taxed at 30%. If nothing else changes, he is over-taxed by $687.50 and gets it back in his assessment.

It can also go the other way. In IR335's own example, a $1,000 bonus on an annualised $80,950 is taxed at 34.75%, $347.50, which is right if that income holds all year. If you have other income and expect a bill, you can ask your employer to use a higher rate. Try your own figures in the bonus tax calculator.

The $50 write-off, and who cannot use it

IRD's automatic write-offs page (updated 30 September 2026) says: "We'll write off your tax to pay if it's $50 or less." It happens when the assessment is issued. It does not apply if you:

• file an IR3 return;
• used a tailored tax code at any time in the year;
• are a primary caregiver entitled to Working for Families at any time in the year.

The write-off is for tax to pay only. It does not cancel small refunds.

Two larger write-offs exist:

• Benefits and NZ Super. IRD may write off a bill of any size if your income is an income-tested benefit, education grant, NZ Super or veteran's pension, with no more than $200 of other income, no tailored tax code and no Working for Families.
• An extra pay period. If the calendar gave you a 27th fortnightly or 53rd weekly payday, the resulting bill can be written off up to a limit. The latest published limits are for the 2026 tax year:

The figures for the 2027 tax year had not been published when IRD last updated the page on 30 September 2026.

Paying a bill and getting a refund

"Most people need to pay their tax by 7 February the year after receiving a bill." For the 2025/26 tax year, which ended on 31 March 2026, that is 7 February 2027. For the current 2026/27 year it will be 7 February 2028. If you use a tax agent with an extension of time, the date is 7 April.

If you cannot pay the full amount, IRD offers instalment arrangements. Talk to it before the due date.

Refunds go to the bank account IRD holds for you, and it will tell you if it has none. "Some or all of your refund may be used to pay any debt you have with us", for example student loan arrears or child support.

How to check your assessment in myIR

Do not assume the assessment is final if it looks wrong. IRD says: "You'll need to tell us if any of the details on your assessment are wrong." Log in to myIR, open your income tax account for the year and work through this list:

1. Every employer is listed. A missing second job is the most common gap.
2. PAYE totals match your payslips, including any bonus.
3. Interest and dividends are shown and look right.
4. Your bank account is current, so a refund lands.
5. Your tax codes made sense for the year. If the same cause will repeat in 2026/27, fix the code now rather than wait for next May.

If IRD sends an "Income tax: more information" request, reply in myIR before the assessment is finalised; it asks about income over $200 that it cannot see. You can make changes in myIR or by calling 0800 227 774.

Questions people ask

When will I get my tax refund?

IRD starts issuing automatic assessments from the last weekend in May and continues into June and July. Refunds are paid from late May to the end of July as each assessment is processed, usually within a few days.

When is a year-end tax bill due?

By 7 February the year after the bill. For the 2025/26 tax year that is 7 February 2027. With a tax agent and an extension of time it is 7 April.

Will IRD write off a small tax bill?

Yes, tax to pay of $50 or less is written off automatically, unless you file an IR3, used a tailored tax code during the year, or were a primary caregiver entitled to Working for Families.

Why did my bonus get taxed so heavily?

It was taxed at one extra pay rate based on your last four weeks' pay times 13, plus the bonus. If that pushed the estimate into a higher band than your real annual income, the assessment refunds the difference.

Can my refund be kept by IRD?

Some or all of it can be used to pay other debt you have with IRD, such as student loan arrears or child support.