Opening a bank account in NEW ZEALAND

The first days in New Zealand 

Your New Zealand adventure is about to start for real. The first steps for most working holiday visa holders in New Zealand are to open a bank account and to get their tax number sorted. This article gives you an idea of this process. It is all pretty straight forward and not as scary as it might seem at first. 

Get your IRD, get your bank account and let’s start travelling (and working of course). 

To speed things up, you might want to apply for your IRD number before arrival as well as your bank account. You are able to do that as long as you have your visa ready and know the first address you are going to stay at after flying in. You would still need to verify your identity to fully open your bank account in person. 

Getting an IRD Number

The IRD (Inland Revenue Department) is New Zealand’s tax authority. It ensures that taxes like income tax and GST (Goods and Services Tax) are paid correctly and also manages things like tax refunds, family benefits, and student loans. Anyone working or running a business in New Zealand needs an IRD number to pay taxes or receive refunds.

Having your IRD number is essential for working in New Zealand, as it ensures you are taxed correctly. Sometimes Banks want you to have an IRD number before allowing you to open a bank account. 

You can simply go online to IRD.govt.nz and find the button to apply for a new IRD number. 

Make sure you have your visa and zour passport ready. Apply for an individual IRD number for new arrivals in New Zealand, no matter if zou have arrived already or are about to arrive. If you are asked to fill in details about your bank account, go back as you might have chosen the wrong option at some point. Just try again, a bank account is not needed to apply for an IRD number. 

When you finish your application it normally just takes a few hours to a maximum of a few days to receive your IRD number via email. 

RealMe

I would recommend setting up your IRD account shortly after. For this you probably need to create a realme account first. You might already have this from your visa application. 

 RealMe is an official online service in New Zealand that allows you to securely log in to various government and private services. With a RealMe account, you can easily manage things like tax matters, visa applications, or study enrolments online. You can also verify your identity through RealMe, which is required for certain applications or contracts. It’s free and often saves you a trip to government offices.

Open a Bank Account

Opening a bank account is one of the first things you should do upon arrival in New Zealand. A local bank account is crucial for receiving your salary and managing day-to-day expenses. There are few occasions when you need cash money in New Zealand. Even on Street Markets it is common to pay via EFTPOS or Bank Transfer. Cash is mostly needed in coins for showers on campsites or laundry machines at hostels. 

The major banks in New Zealand include ANZ, BNZ, Kiwi Bank and Westpac. 

General Steps to open a bank account:

1. Choose a bank 

2. Fill out an application form and provide your documents.

3. Deposit funds to activate your account. 

Every bank is a little different when it comes to their process of applying for and opening an account with them. For opening an account at any bank, you will need:

• your passport, 

• your visa that allows you to work in NZ, 

• and a Proof of Address.

Proof of Address 

At Kiwibank, the proof of your IRD number is often accepted as address verification. Other banks require proof in the form of a rental agreement, a utility bill with a local address, or similar. As a backpacker, you might not have these documents, but forms issued by your accommodation can also be accepted. However, there are reports that some bank branches do not accept these. In this case, it helps to simply visit another branch and try again.

BNZ

At BNZ (Bank of New Zealand), you can fill out the application for a new account online. There are three ways to open the account:

1. With the help of RealMe verification,

2. By uploading a photo, which only works for holders of a New Zealand passport or driver’s license,

3. Or by filling out the online application and completing the verification in a branch.

Kiwibank

To open an account with Kiwibank, zou can simply fill out the online join form. Then zou will need to verify who zou are by either using an ID checker on your phone or by visiting a branch nearby.

Westpac

Westpac also offers online account opening. However, a New Zealand passport or driver’s license is required for this. If you don’t have one, you should schedule an appointment at a branch to complete the application in person.

ANZ

At ANZ, you can also fill out the application online. However, just like with BNZ, you will need to go to a branch for verification. Often, you will receive an EFTPOS card immediately. However, I recommend also applying for a debit card, as only with this card can you make online purchases and bookings.

If you apply for a debit card, it will be sent to the address you provided. Hostels often have a collection point for incoming mail, and cards are typically delivered within 4–10 business days, sometimes even faster. If you don’t plan to stay at one place for the entire period, you can plan a short road trip that loops back to your starting point. By the time you return, your bank card should have arrived.

For ideas on short loop tours, you can check here.

Manage taxes 

As a Working Holiday Visa holder, you can manage your taxes easily through your IRD account. Once you have your IRD number and start working, your employer will automatically deduct taxes from your pay. At the end of the tax year (March 31), you can log in to your IRD account to check if you’re eligible for a tax refund or need to pay extra. Simply review your income details, confirm them, and the IRD will calculate whether you get a refund or owe any tax.

In New Zealand, your income is taxed annually (from April 1 to March 31). If your total income for the financial year is below a certain threshold, you fall into a lower tax bracket. For example, if you earn less than 48,000 NZD, your tax rate is 17.5%, but if your income exceeds this, the higher rate of 30% applies to earnings above that threshold. If your employer applied too much tax, you can claim a refund at the end of the year.

Example Calculation:

• Working as a chef: You work for 5 months (August to December) earning 50 NZD per hour for 40 hours a week.

• Weekly income: 50 NZD x 40 hours = 2,000 NZD

• Monthly income: 2,000 NZD x 4.3 weeks ≈ 8,600 NZD

• Total income for 5 months: 8,600 NZD x 5 = 43,000 NZD

• Total annual income: After December, you spend 4 months traveling with no income. Since you arrived in July, your total income for the financial year is 43,000 NZD.

• Tax calculation: The 17.5% tax rate applies to income between 14,001 NZD and 48,000 NZD. However, your employer may have withheld taxes at the higher rate of 30% on earnings above 48,000 NZD.

• Actual tax owed:

• 14,000 NZD x 10.5% = 1,470 NZD

• 29,000 NZD (43,000 - 14,000) x 17.5% = 5,075 NZD

• Total tax owed: 1,470 + 5,075 = 6,545 NZD

• Tax deducted by employer: If your employer applied the higher 30% rate to some of your income or calculated incorrectly, they may have deducted more than required. For example:

• 43,000 NZD x 20% (a possible averaged withholding rate) = 8,600 NZD

Refund:

• Overpaid tax: 8,600 - 6,545 = 2,055 NZD.

At the end of the financial year, you can claim this 2,055 NZD through your IRD account, as it was overpaid.

Disclaimer

This article has been written to the best of my knowledge and ability. While I strive for accuracy, errors cannot be completely excluded. Please do not rely solely on the information provided in this article. It is intended to give a general overview. For specific details, you should independently verify the information and consult directly with the relevant bank or authority.