Young workers out of pocket

19:46, May 24 2012
Kapiti paper boy Alex McLaughlin
BAD NEWS: 'I only get a little bit of money - any taken away makes you wonder about it,' says Kapiti paper boy Alex McLaughlin, who will now be taxed on the $10 a week he earns.

The taxman is making a grab for up to $245 a year from children working at the local supermarket, shop or on a paper run – tax they used to be able to claim back.

Children earning less than $2340 a year will no longer be able to claim back the tax they pay through formal employment.

However, the taxman is not going after the tax-free income they might earn from baby-sitting or mowing the neighbour's lawn.

In the past, a child under 14 or under 18 and still at school, working in a shop or some other formal workplace could claim back the 10.5 per cent tax their employer paid at source.

In the 2012-13 tax year, those children will no longer be able to claim the tax back.

In the past, children could claim back up to about $245 a year if they made the maximum under the tax break.


Next year, they will not be able to claw back the tax.

Deloitte chief executive Thomas Pippos said if a child worked at a shop making about $2000 a year, PAYE tax would be deducted, but they could get a refund on that or choose a different tax code so the tax was not deducted.

There will only be a tax-free exemption for the cash jobs such as cutting grass or baby-sitting. Children will not have to file a tax return on the money they make in such cash jobs, as long as it is under $2340 a year.

"The supermarket stuff gets taxed at source and falls into the tax take," he said.

Essentially, Inland Revenue was saying if children did a proper job, if fell inside the rules and tax had to be paid.


Kapiti College pupil Alex McLaughlin, 17, is disappointed his meagre earnings delivering two local newspapers a week look set to be taxed.

He saves the $10 a week he earns delivering the papers to contribute towards things that come up, including trips away.

"My parents make me pay for things because I am old enough now," he said. "It is only a tiny amount of money, it is going to be a bit irritating, but money is money – I am lucky to have a job at all."

He delivers about 120 papers each run, which takes him about an hour each time, and has been doing it for about a year. He is already looking for a better-paying job.

"It will be frustrating," he said of the tax changes. "I only get a little bit of money – any taken away makes you wonder about it."

Shannon Barclay, 15, also from Kapiti College, has been delivering a local newspaper and circulars for several years and is not impressed to discover she will be taxed.

She delivers circulars twice a week after school, normally taking about an hour for each delivery. "We don't get paid too much – usually less than $20 a fortnight. It rains and stuff but you still have to do it. I was probably going to give it up anyway and get a better job."

Teenagers who deliver the Kapiti Observer earn 2.5 cents a paper. The average paper run is between 100 and 200 papers.

The Dominion Post