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Send your questions to susan.edmunds@rnz.co.nz
If I have a payrise and want to save that amount, should I up my KiwiSaver or do I invest in other funds, other ways?
I think it depends a lot on your individual circumstances. If you're already focused on saving for a first home in KiwiSaver, for example, it can make sense to increase your contribution.
But otherwise, you could be better to set up another investment that will run alongside KiwiSaver, without all the rules.
Dean Anderson, who founded Kernel Wealth, points out that you should also consider whether your employer will match a higher KiwiSaver contribution rate.
Some employers will match four percent, or more, and if that's available, it makes sense to make the most of it. If you don't, you're basically leaving that money on the table.
Anderson said otherwise there aren't a lot of benefits to KiwiSaver compared to having your money in a different savings or investment plan.
"However, if you are someone who isn't disciplined at maintaining a separate and automated investment/savings plan, then increasing your contributions to KiwiSaver can be a good option to build up a retirement nest egg."
Whatever you choose to do, it is good idea to increase your savings as soon as you get a pay rise, and before you get used to it and would miss the extra money.
Using it to pay off debt can also be a good idea.
I'm thinking about starting up a side hustle on top of my normal job. What do I need to do about tax?
Lots of people have "side hustles" - businesses or streams of income that they earn alongside their main job.
It's a good idea to get across the tax implications early, so you know what to expect.
Inland Revenue (IR) does allow some leeway for "hobbies" that occasionally provide income, but if you intend to make a profit from your side hustle, you need to be prepared to pay tax.
That applies no matter how much profit you make. (Your profit is what you bring in, minus your expenses. If you have a lot of set up costs you might not actually make a profit for a while.)
You will need to keep records and file income tax returns. You'll also need to pay ACC levies. You could keep a portion of what you earn aside in a different bank account to cover this. You might start out saving quite a bit, and then reduce it as you get a good understanding of what you're likely to need to pay.
If you're likely to make more than $60,000 a year, you may also need to register for GST. When you're charging GST, you can also claim it back on purchases you make for your business.
There are platforms that can help you work out your tax obligations, such as Hnry, but I'd recommend a meeting with an accountant at least initially to ensure that you have set everything up correctly and there is nothing that could catch you out in future.
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