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Home / New Zealand

Lotto Powerball $42m jackpot: Interest alone earns you $844,000 a year

Luke Kirkness
By Luke Kirkness
Sport Planning Editor·NZ Herald·
23 Feb, 2020 11:00 PM2 mins to read

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Lotto - the facts
What are your chances of winning the big one?
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      What are your chances of actually winning the big one? Video / NZ Herald
      NOW PLAYING • Lotto - the facts
      What are your chances of winning the big one?

      Do you think you would be able to live off a yearly income of $844,000?

      That would be the amount of cash you could have sitting in your bank account after-tax if you won Powerball's $42 million jackpot.

      Powerball jetted to its second-largest ever jackpot in Lotto NZ history on Saturday after the $35m prize went unclaimed.

      READ MORE:
      • $42m Lotto Powerball jackpot up for grabs in Wednesday's draw
      • $35m Lotto Powerball draw: No winners - prize jackpots to $42 million
      • Lotto Powerball $35m jackpot: These day trips made New Zealanders millionaire's
      • $18 million Lotto Powerball win still unclaimed

      Now the prize sits at an eye-watering $42m for Wednesday night's draw.

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      If you were lucky enough to win, you would not even be forced to pay tax on your prize - only on any interest you earn if you invested the prize.

      But only if you, the winner, were a New Zealand tax resident, KPMG partner in tax Peter Scott told the Herald.

      "That's a good thing about being in New Zealand, which is different to overseas jurisdictions which do tax those sorts of things," he said.

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      "Obviously, you'll be taxed if you go and invest that based on the interest or investment earnings but not on the initial pay-out."

      Lotto
      Lotto

      If you put the $42m in the bank with 3 per cent interest, you could earn a whopping $1,260,000 in interest each year.

      The tax would not even take out a large bite of your earnings, assuming the cash was being earned directly and not through a company.

      Of the $1.26m, around $416,000 would be lost in tax, leaving you with about $844,000 in your bank account.

      Discover more

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      The bank would do the withholding tax for you and it would be withheld before the bank paid out the interest, Scott said.

      But the $844,000 would be worth celebrating and would be more than ample to live off while your millions earned thousands.

      It's more than 10 times what a secondary school teacher with more than five years' experience might earn yearly (around $71,000 to $80,000).

      And Prime Minister Jacinda Ardern's impressive salary of $470,000 would not even come close to yours either.

      Save
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