Winning Lotto: How much would you be taxed?

Lotto are expecting over a million tickets to be sold for tonight's Powerball jackpot draw (File)
Lotto are expecting over a million tickets to be sold for tonight's Powerball jackpot draw (File)

Someone in New Zealand could be $34 million richer tonight if they can beat the odds and solely claim Lotto's jackpotted Powerball draw.

And unlike some countries lottery draws, you wouldn't have to pay a lump sum tax on your winnings, but once it's in your bank account you would get taxed on the interest earned.

Although $34 million may seem an insane and life-changing amount of money, it's not much compared to the Crown Entity's annual takings.

While you might imagine Lotto gives most of its earnings to community organisations and various charities, in reality only 22 percent goes to the Lottery Grants Board. In the last financial year, the Board received all of Lotto's net-profit of $204 million, while $539 million has handed out in prize money.

Lotto's operating expenses for the last financial year amounted to $61.6 million. This sizeable sum was used to produce the live Lotto draw, service its retail network, operate gaming and IT systems, marketing, promotion and employee remuneration.

In its annual report for the last financial year, Lotto stated one employee was paid a salary of $450,000 (very likely Chief Executive Wayne Pickup), while another 37 members of staff received salaries of over $100,000.

Of these, 12 employees received salaries of over $150,000, with four earning over $200,000.

Lotto's most popular selling ticket is a $16 triple dip, and Lotto's General Manager of Communications Emilia Mazur told Newshub players with that particular ticket have got a 1 in 3.8 million chance of taking home the big prize.

"It's not the biggest jackpot we've ever offered, but if somebody does win, and they're the only person that does, this would be the largest Powerball prize ever won by an individual.

"We're expecting over a million tickets to be sold for Wednesday night's draw."

Winning $34 million would come as a shock to anyone, so how do you cope with such a windfall?

Winners are provided with support, guidance, and are referred to experts who can help them manage their winnings well into the future.

"Once they give us a call we'll work out the right time for them to come up to our office in Auckland and then we sit down with them in person," says Ms Mazur.

Once a major Lotto winner has visited its Auckland head office, they receive their winnings in their bank account the next day.

Ms Mazur says: "Lots of our winners tell us they refresh internet banking quite religiously until they see all of those zeros."

Not if they don't want it to. Lotto told Newshub that they will ensure a winner's anonymity if that is their preference. There is also no legal requirement for a major Lotto winner to talk about their windfall publically.

There have been instances in the past of major winners being pressured into giving cash to long-lost friends and family.

Unichem Stortford Lodge in Hastings has sold about forty First Division, Powerball and Strike winning tickets sold over the years.

It's sure to be doing a roaring trade today.

Newshub.

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