What is RWT?
RWT stands for resident withholding tax. It is tax deducted from interest and dividend income before it reaches you. Your bank, fund manager, or investment provider does the deducting - you never see that portion of the money.
If you have a savings account, term deposit, or shares in a New Zealand company, RWT is almost certainly already being deducted from your investment income. It is not an extra tax on top of income tax - it is income tax collected early, at the source, so IRD gets it before you do.
At the end of the tax year IRD squares everything up. If too much RWT was deducted during the year, you get a refund. If too little was deducted, you may have tax to pay.
Default rate33%
No IRD number given45%
Dividend RWT rate33%
What income does RWT apply to
RWT applies to interest from NZ bank accounts and term deposits, dividends from NZ companies, and unit trust distributions.
RWT does not apply to PIE income - portfolio investment entities use a separate system called PIR rates. It also does not apply to overseas investment income, which has its own rules, or income that is exempt from tax.
RWT rates for individuals
| Total taxable income | RWT rate |
|---|
| Up to $15,600 | 10.5% |
| $15,601 to $53,500 | 17.5% |
| $53,501 to $78,100 | 30% |
| $78,101 to $180,000 | 33% |
| $180,001 and over | 39% |
Rates confirmed from IRD, applying from 31 July 2024.
If you do not pick a rate your bank will deduct RWT at 33% by default. If you have not given your IRD number to your bank at all, they must deduct at 45% - the non-declaration rate. Give your bank your IRD number to avoid this.
Dividends are different
Interest income uses the rates in the table above. Dividends and unit trust distributions from NZ companies are taxed at a flat RWT rate of 33%, regardless of your income tax rate. If you are in a lower bracket the difference comes back to you at year end as a refund or reduced tax bill.
NZ companies may also attach imputation credits to dividends. These represent income tax the company has already paid, and they can offset the RWT deducted from your dividend.
RWT rates for companies and trustees
Companies: if you have given your IRD number and company status to your interest payer, you can use 28%, 33%, or 39%. If you do not choose a rate the default is 28%.
Trustees: trustees are not required to notify company status and may use 17.5%, 30%, 33%, or 39%. Trustees of a testamentary trust may also use 10.5%.
Māori authorities: may use 17.5%, 30%, 33%, or 39% and are not required to notify company status.
Joint accounts
If you hold a joint account you can only use one RWT rate for the whole account. If one holder earns over $53,500 and the other earns $53,500 or less, using 30% avoids the higher earner getting a tax bill at year end. Investment income from joint accounts is split equally between account holders who have given valid IRD numbers to their payer. You can change this split through myIR if needed.
Official IRD guidance
Check the official IRD guidance for the latest published rules, thresholds, timing, and definitions that apply to RWT.
Disclaimer
This calculator provides estimates only and does not replace official IRD calculations.
- Uses a single selected RWT rate.
- Assumes the entire amount is subject to RWT.
- Does not compare final end-of-year tax outcomes.
Frequently asked questions
What is RWT in NZ?
RWT is resident withholding tax - tax your bank or investment provider deducts from interest and dividends before paying you. It is income tax collected at the source, not an extra tax on top.
What RWT rate should I use?
Use the rate that matches your income tax bracket. If you earn between $53,501 and $78,100 use 30%. Between $78,101 and $180,000 use 33%. Getting it wrong means either a refund or a tax bill at year end.
What happens if I do not give my IRD number to my bank?
Your bank must deduct RWT at 45% - well above most people's actual tax rate. Give your bank your IRD number and choose the right rate to avoid overpaying.
Does RWT apply to my savings account?
Yes. Interest on savings accounts, term deposits, and most other NZ bank accounts is subject to RWT, deducted by your bank before they pay you.
Is RWT the same as NRWT?
No. RWT is for NZ tax residents. NRWT is non-resident withholding tax and applies to interest, dividends, and royalties paid to people who are not NZ tax residents.
How do I check how much RWT has been deducted?
Your bank or investment provider will send you a tax certificate each year. You can also see it in myIR - IRD pre-populates RWT amounts into your income tax assessment automatically.
Why does the rate I choose matter?
If your RWT rate is too low you may have tax to pay at year end. If it is too high you overpay during the year and wait for a refund. Match it to your income tax rate and you should come out square.