Tax Rates on New Zealand salaries

Posted on 25 February 2008

Base Tax rates on income for New Zealand residents are currently as follows:

tax on annual earnings
19.5% up to $38,000
33.0% between $38,000 and $60,000
39.0% over $60,000

For example, a labourer earning $600 per week would earn $31,200 before taxes over the course of a year. Income taxes paid (through PAYE) would be 31200 * 0.195 = $6084, or $117 per week.


An IT specialist earning $100,000 per year would pay taxes as follows:

38000 * 0.195=$7410
(60000-38000) * 0.33=$7260
(100000-60000) * 0.39=$15600
  $30270

For a total tax burden of $30,270 and an effective income tax rate of 30.3% on their salary.


Actual taxes deducted or owed throughout the year may differ if you earn other income through a second job, business or investments, if you partake in the kiwisave scheme, or if you are required to make payments to your student loan.

Tax rates are a hot topic in this year's coming elections so expect to see lower tax rates on earnings from the 2009 tax year.

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The Labour Government announced a package of tax cuts, the first of which will come into effect from 1 October 2008.

National are likely to reveal their own tax cut plans a few weeks before this year's election, which is likely to be towards the end of October.

Having won the election, National effected a new set of tax rates for the year beginning 1 April 2009, which can be seen here.