Kiwi tax refunds up 23pc

Research found those who earn $60,000 to $70,000 per year or under $10,000 per year generally recieve the largest tax returns. Photo / iStock

The average Kiwi tax refund has increased 23 per cent over the past three years, according to new research.

After analysing more than 300,000 tax returns, MyTax found the mean tax refund across all salary bands is $521.

Chief executive of MyTax.co.nz Lester Binns said while wage earners in the $60,000 to $70,000 income bracket generally receive the largest tax returns, those in the under $10,000 bracket have made the most gains - with refunds up more than 70 per cent to an average of $421.

Binns said change of jobs, bonus or wage increases, exchange of annual leave for wages and incorrect tax codes all make it likely a person is due a tax refund.

"Our research shows that the higher number of employers you have had in the past year, the more likely it is that you are owed money by IRD," he said.

"Workers who have had just one employer for the year have about a 50/50 chance of being due a refund, those with two employers are 1.8 times more likely to get money back and for those with three employers, 2.1 times more likely."

Employees of businesses which use manual payroll processes have almost certainly overpaid income tax and will be due a refund.

"The manual payroll system tends to have a number of rounding, and often human calculation errors which over the course of a year add up to an overpayment of hundreds of dollars," Binns said.

Taxpayers who want to check if they are due a refund should contact IRD, a registered accountant or a personal tax agent.