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Starting work

Working in a hospital.

One of the best things about starting work is the freedom you gain from earning your own money. But it’s also a good time to think about what you want in life. Having goals and a plan will help you create the life you want for yourself – right from day one. When you start your first job you’ll need to sort out a few basics. You’ll need to get an IRD number, choose the right tax code and decide whether you want to join KiwiSaver.

Your pay

Your employment agreement will show how much you’ll be paid as well as holiday pay, sick leave, and any bonuses and commissions. It’s illegal for your employer to pay you less than the minimum wage.

Find out more about the minimum wage on the Department of Labour website.

When you get paid your employer will probably also give you a payslip (paper or electronic) which will show:

  • Gross pay: The total you earned before any tax or other deductions were taken out.
  • Tax and other deductions: These can include PAYE (Pay As You Earn tax), student loan repayments, child support, ACC, KiwiSaver, and any repayments ordered by the court for fines or other debts.
  • Any other deductions: For example, health insurance or social club fees.
  • Net pay: The amount that will actually be paid into your bank account.

Michael Price

For Michael Price, the 2011 Canterbury earthquake brought a different perspective on his finances.

Read more about Michael Price

Paying tax

Unless you’re a school student earning less than $2,340 a year, you’ll need an IRD number and tax code when you start work. Your employer will give you a tax code declaration form to fill out.

It’s important that your employer has the correct tax code for you. Otherwise you could pay too much tax or not enough and have to pay extra tax at the end of the year.

Your IRD number tells your employer how much tax to deduct and give to Inland Revenue. If you don’t give your employer your IRD number you’ll be taxed at a higher rate until you supply one. Find out how to get an IRD number on the Inland Revenue website.

You can also find out more about paying tax and tax codes on the IRD’s helpful What’s Tax website.

Tax refunds

If you’ve worked less than 12 months at the end of the tax year (March 31) you may be entitled to a tax refund.  Work out if you can claim a refund with the most recent Inland Revenue personal tax summary calculator

KiwiSaver and other workplace benefits

All employers offer KiwiSaver, the government’s work-place retirement savings scheme. Your employer will enrol you automatically unless you opt out. For most people it’s a good way of saving for retirement – or for a first home.

KiwiSaver offers some great benefits:

After saving for three years, you may be able to put some of your savings towards buying your first home, which the government may also match up to a certain level. Find out more on the Housing New Zealand website.

Some employers also offer their own workplace retirement savings schemes, which may have different contribution rates and benefits to KiwiSaver.

You can belong to both schemes, but your employer only has to contribute to one.

Other benefits

Some employers offer other benefits as well as KiwiSaver. It’s worth finding out about these as they may boost your pay, save you money, or help you to progress your career.

The benefits may include free or subsidised gym membership, professional development courses or subsidised training, health insurance, eye checks, free counselling, free or subsidised housing, or even a company car.

If you are getting any government benefits when you start your first job, you’ll need to contact Work and Income to see if your job will affect them.

Government help

If you have children, you may be eligible for Working for Families. It’s a government package designed to help make it easier to work and raise a family. It pays extra money to:

  • Almost all families with children earning under $70,000 a year
  • Many families with children earning up to $100,000 a year
  • Some larger families earning more than $100,000.

Find out more on the Working for families website.

Your budget

When you first start work it’s tempting to spend everything you earn. But you’ll be better off if you get into the habit of putting some of your money aside to help you reach your goals.

Whether it’s a house deposit, car, overseas travel or study, a budget will help you get there. As soon as you know how much you’ll get paid, make a budget with our money planner.

When you make a budget you list what you earn, what you expect to spend, and find out whether you have any money left over.

If your budget shows you have money left over and you owe money on credit cards, hire purchase or other loans, put it towards paying off your debts. Otherwise save it for your goals!

Where to go for help

mightymouse