RWT (Resident Withholding Tax)

Resident Withholding Tax (RWT) is a tax automatically deducted from investment income earned by New Zealand tax residents. RWT applies to interest from bank accounts, term deposits, bonds, and dividends from NZ companies. The tax is deducted at source by the payer (bank, company) before the income is paid to you, similar to how PAYE works for wages.

RWT rates for the 2025-26 tax year range from 10.5% to 33%, based on your total annual income. You can nominate your RWT rate with your bank or investment provider. If you choose a rate that's too low, you may owe additional tax at year-end. If it's too high, you'll receive a refund. RWT rates are: 10.5% (income up to $14,000), 17.5% ($14,001-$48,000), 30% ($48,001-$70,000), 33% (over $70,000).

Real-World Example If Claire earns $55,000 in salary and $3,000 in bank interest, she should set her RWT rate to 30%. Her bank automatically deducts $900 (30% of $3,000) as RWT and sends it to IRD. This is credited against her total tax liability when she files her return.