The new National Government has put in place a revised set of personal tax rates to take effect as of April 01, 2009.
Most notably the middle tax bands have been changed to compensate for increases in the national average annual earnings. The top tax rate has also been reduced slightly to 38% and is scheduled to drop further in future tax years.
Further adjustments to tax rates and thresholds are also on the cards for the tax years beginning April 2010 and April 2011.
Tax rates effective as of 1 April 2009:
(excluding ACC and rebates)
|tax||on annual earnings|
|12.5%||up to $14,000|
|21.0%||between $14,001 and $48,000|
|33.0%||between $48,001 and $70,000|
For example, a specialist earning $100,000 per annum would pay tax as follows:
|14000 * 0.125||=||$1750|
|(48000-14000) * 0.21||=||$7140|
|(70000-48000) * 0.33||=||$7260|
|(100000-70000) * 0.38||=||$11400|
Thus making a total tax bill of $27,550 or an effective income tax rate of 27.6% (which compares favourably with an effective rate of 30.3% a year earlier).