Understanding resident withholding tax (RWT)

Resident withholding tax (RWT) is a tax deducted from the interest you earn on banking products, such as term deposits and savings accounts, as a New Zealand tax resident. We deduct your RWT and pay it to Inland Revenue (IRD) on your behalf.

If you’re not a New Zealand tax resident, non-resident withholding tax (NRWT) or approved issuer levy (AIL) will be deducted instead.

RWT rates

You should let us know what RWT rate is appropriate for you. You can find the current RWT rates on the IRD website. If you’re an individual, your RWT rate is based on your level of taxable income. Choosing a rate that is too low could result in a tax liability at the end of the year. If you choose a rate that is too high you’ll need to recover any tax deductions from IRD at the end of the tax year.

You should also provide us with your IRD number. If you don’t provide it, we’re required to deduct RWT at the non-declaration rate of 45%.

IRD may direct us to apply a different RWT rate than the one you select, and if so, we’re required to comply. If this happens, IRD will contact you directly.

RWT exemptions

If you have a RWT exemption, we don’t have to deduct RWT from the interest you earn. Let us know if you have exempt status and provide your IRD number so we can verify it with the RWT exemption register. 

Important: The information on this page is general in nature and does not constitute specific tax advice to any person. To the extent that any such information constitutes financial advice, it does not take into account any person's particular financial situation or goals. We recommend you obtain independent tax advice for your own circumstances. BNZ does not accept any liability for the use of, or reliance on, this information.