Embargoed until 10:45 am – 30 August 2001
Income of Persons (Final): For the Year Ended March
1999
Highlights
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Average taxable income increased 3.6 percent to $24,251.
Amount of tax paid represented 17.6 percent of total taxable income.
Average amount of tax paid decreased 2.9 percent to $4,271.
Female taxable income was 64 percent of male taxable income.
1997/98 tax year
1998/99 tax year
Total taxable income
$67,821 million
$69,830 million
Average taxable income
$23,418
$24,251
Average amount of tax paid
$4,398
$4,271
Number of personal taxpayers
2,896,100
2,879,470
Brian Pink
Government Statistician
30 August 2001
Cat 09.503 Set 01/02 – 034
Commentary
Final results for the 1998/99 tax year
This release contains final results for the 1998/99 tax year which update the provisional results
published in February this year.
Coverage
The statistical population for these statistics is all persons for whom tax information is available
in the 1998/99 tax year. This includes taxpayers for whom a tax deduction certificate was
received by the Inland Revenue Department, but who did not file a return. The number of nonfilers has increased over recent years due to changes in the tax system. The change in the number
of personal tax payers for whom tax information is available may be affected by changes in the
tax system as well as changes in the tax base.
Income earners
People receiving income have been classified into four categories:
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Self-employed,
Wage and salary earners,
Investment income earners, and
Recipients of government transfer income.
These people are classified according to the source from which they received the most income. If
their taxable income was a loss, then they are classified according to the source from which they
made the greatest loss. Recipients of government transfer income include those who receive
income tested benefits or New Zealand Superannuation.
Between the 1997/98 and 1998/99 tax years average taxable income increased 3.6 percent to
$24,251 and the average amount of tax paid decreased 2.9 percent to $4,271. The average amount
of tax paid (as well as the total amount) was affected by the removal of the surcharge on New
Zealand Superannuation.
Income from wages and salaries was the largest source of total taxable income. Total income
from wages and salaries in the 1998/99 tax year was $47,511 million or 68.0 percent of total
taxable income. The next largest source was government transfer income at 13.5 percent ($9,422
million) followed by business income at 10.8 percent ($7,572 million).
This order remained unchanged between the 1993/94 and 1998/99 tax years over which time
wages and salaries have made up between 67 and 69 percent of total taxable income, government
transfer income has comprised between 13 and 15 percent, and business income has made up
between 11 and 13 percent.
Income deciles by age and sex
The deciles of taxable income are estimated (to the nearest $10) for all people aged 15 years or
over. Each decile generally represents 10 percent of the population. However the third decile
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contains 11.3 percent of the population and the fourth decile 8.7 percent of the population. This is
due to one of the New Zealand Superannuation rate values falling on the boundary between the
third and fourth deciles. Approximately 90,000 people receive this rate and no attempt has been
made to apportion these people between the third and fourth deciles.
Females are more concentrated in the lower income deciles than males. Females make up 56
percent of the first decile (those receiving less than $2,550) while males make up 74 percent of
the tenth decile (those receiving $48,800 or more). Sixty-eight percent of females are in the first
six deciles compared with 51 percent of males.
About two-thirds of those in the 15 to 19-year age group (68 percent) are located in the first two
deciles. In contrast, 45 percent of those in the 40 to 49-year age group are in the eighth, ninth and
tenth deciles.
Average income by age and sex
The highest average annual taxable income of $33,045 was received by those in the 40 to 49-year
age group, followed by the 50 to 59-year age group with $32,006. Over the total population,
female income was 64 percent of male income in the 1998/99 tax year; this has been steady over
the past five years. The age groups where female income as a percentage of male income was
highest were the 70-and-over age group at 96 percent, the 15 to 19-year age group at 88 percent
and the 20 to 29-year age group at 81 percent.
Average annual taxable personal income has increased steadily from $20,525 in the 1993/94 tax
year to $24,251 in the 1998/99 tax year. The average annual percentage change has been 3.4
percent. Female income as a percentage of male income has remained steady.
Changes to the tax system
In the 1999/2000 tax year the Inland Revenue Department made changes aimed at simplifying the
tax system for wage and salary earners. A consequence of these changes was the elimination of
the IR5 form that wage and salary earners used to reconcile their total annual tax liability. Income
and tax information for wage and salary earners is now obtained directly from employers, via the
employer monthly schedules. Due to these changes, this is the last release of Incomes of Persons
using the current methodology.
The simplification of the tax system has changed the way tax information is managed and
processed by both the Inland Revenue Department and Statistics New Zealand. As a result there
will be no provisional release of 1999/2000 data and final results for the 1999/2000 tax year will
be produced in August 2002.
For technical information contact
Caroline Brooking or Ann Ball
Wellington 04 495 4600,
Email: [email protected]
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Technical notes
Population
The statistical population covered by these statistics is all individuals for whom tax information is
available for the 1998/99 tax year. This includes people who submitted a tax return and taxpayers
for whom a Tax Deduction Certificate was received by the Inland Revenue Department but who
did not file a return.
Persons who were legally required to submit a return for the 1998/99 year were those who:
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received income of more than $38,000
received income from business, rents, or any other income from which tax was not
deducted
received income from withholding payments
received income from overseas
received income from which tax had not been correctly deducted at source
received Family Support (pursuant to certain conditions)
had a special tax code or the Shearers' code SSH or SHR
had a student loan
were an IR56 payer
were liable to pay child support.
The sample
The statistical estimates were derived from:
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a two percent sample of wage and salary earners, and a 10 percent sample of non-wage
and salary earners that filed a tax return.
a two percent sample of those taxpayers for whom a Tax Deduction Certificate was
received by the Inland Revenue Department, but who did not file a return.
Reliability of the survey estimates
This survey is subject to sampling and non-sampling error. In times of low population growth the
variability from both sampling error and changes in tax processing procedures may be more
visible in the population estimates.
Definition of assessable income
Assessable income in these statistics is as defined by the Inland Revenue Department in
accordance with the Income Tax Act 1994.
Definition of tax payable
Tax payable is the amount of tax assessed to be payable after the deduction of rebates and tax
credits.
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1998/99 data
This release represents final data for the 1998/99 tax year. A full set of tax information for the
1999/2000 tax year will not available until August 2002. This is due to changes being made by
the Inland Revenue Department to their processing system.
Copyright
Information obtained from Statistics New Zealand may be freely used, reproduced, or quoted
unless otherwise specified. In all cases Statistics New Zealand must be acknowledged as the
source.
Liability
While care has been used in processing, analysing and extracting information, Statistics New
Zealand gives no warranty that the information supplied is free from error. Statistics New Zealand
shall not be liable for any loss suffered through the use, directly or indirectly, of any information,
product or service.
Timing
Timed statistical releases are delivered using postal and electronic services provided by third
parties. Delivery of these releases may be delayed by circumstances outside the control of
Statistics New Zealand. Statistics New Zealand accepts no responsibility for any such delays.
Next release ...
Income of Persons: Year ended March 2000 will be released in August 2002
5
Tables
The following tables can be downloaded from the Statistics New Zealand website in Excel 97
format. If you do not have access to Excel 97 or higher, you may use the Excel file viewer to
view, print and export the contents of the file.
List of tables
1.
2.
3.
4.
5.
Personal incomes - 1998/99 tax year
Number of people by income, decile and sex
Number of people by income, decile and age
Average annual personal income by age and sex - 1998/99 tax year
Average annual personal income by sex - 1993/94 to 1998/99 tax years
6