NZ Tax Brackets 2025/2026: What You Pay at Every Income Level

New Zealand uses a progressive tax system — each portion of your income is taxed at the rate for that band only, not a single flat rate on all your earnings. For the 2025/26 tax year (beginning 1 April 2025), there are five income brackets:

These thresholds were updated on 31 July 2024 and took effect from 1 April 2025. They apply to salary, wages, sole trader income, and most other taxable income sources. Always check the IRD website for the latest rates, as thresholds can change with annual budgets.

Here's how progressive taxation actually works on a $60,000 salary, as of the 2025/2026 tax year. You don't pay 30% on the entire amount — only on the portion that falls within each bracket.

Your marginal tax rate — the rate on your last dollar earned — is 30%. But your effective tax rate is only about 17.0% ($10,220.50 ÷ $60,000). That's the figure that actually reflects your overall tax burden.

This distinction matters when evaluating a pay rise. An extra $1,000 at this income level is taxed at 30 cents in the dollar — not 17 cents. Use our tax calculator to run your own figures instantly and see exact take-home pay after all deductions.

Always confirm current thresholds with IRD, as bracket amounts may change with future budgets.

Here's how tax stacks up across a range of salaries, using the five brackets in effect from 1 April 2025. These figures cover income tax only — before ACC levies, KiwiSaver, or student loan repayments.

Notice how the effective rate climbs gradually from 13.9% to 28.5%. There are no sudden jumps when you cross into a new bracket — only the dollars earned within that bracket are taxed at the higher rate. Someone earning $90,000 pays the same tax on their first $15,600 as someone earning $30,000.

To see your exact take-home figure — including ACC, KiwiSaver, and student loan deductions — try the PAYE calculator. As always, confirm current rates with IRD, as thresholds may shift with future budgets.

This is the most misunderstood concept in New Zealand tax. Your marginal tax rate is the rate applied only to your last dollar earned — the highest bracket your income reaches. Your effective tax rate is what you actually pay overall, calculated by dividing your total tax bill by your total income.

Here's why it matters. Say you earn $100,000 a year. Your marginal rate is 33%, but you don't pay 33% on the entire amount. As of 2025, your tax is calculated in layers:

Your effective rate? Just 22.9% — well below the 33% marginal rate. This is why moving into a higher bracket never means you take home less money. Every extra dollar is taxed at the higher rate, but all previous dollars remain taxed at their original, lower rates.

The 2024 bracket adjustments were the first changes to New Zealand's personal income tax thresholds in over a decade. Introduced as part of the coalition government's tax relief package, the new thresholds took effect from 31 July 2024.

Here's how the thresholds shifted:

For most earners, the adjustment means more income is taxed at lower rates. Someone on $78,100, for example, now avoids the 33% bracket entirely — a saving of roughly $1,040 per year compared to the old thresholds. The top threshold at $180,000 remained unchanged, meaning higher earners still benefit, but the relief is concentrated on low-to-middle incomes. As always, confirm the latest figures with IRD, as thresholds may be adjusted in future budgets.

If you hold two or more jobs at the same time, your second (and subsequent) employer must deduct tax using a secondary tax code rather than the standard M code. This ensures you're taxed closer to the correct amount across all your income.

As of the 2025/2026 tax year, secondary tax codes correspond to the main bracket your combined income is expected to fall into:

For example, if your main job pays $50,000 and your weekend job pays $10,000, your combined income is $60,000. You'd use the SH code for the second job, so that income is taxed at 30%.

Choosing the wrong code is a common mistake. If you select too low a code, you'll face a tax bill after your end-of-year assessment; too high, and you'll receive a refund. Either way, IRD reconciles the difference automatically — but getting it right upfront avoids surprises. Always check the latest rates on the IRD website.

Your tax bracket rate isn't the only percentage taken from your pay. The ACC earner's levy funds New Zealand's accident compensation scheme, and it's deducted from every dollar you earn up to a cap.

As of the 2025/2026 tax year, the ACC earner's levy is 1.67% of your gross earnings, capped at $152,790 of insurable earnings. Your employer deducts it alongside PAYE, so you'll see it as a separate line on your payslip.

This means someone earning $70,000 faces an effective income tax rate of around 18.9%, plus another 1.67% for ACC — bringing the combined deduction to roughly 20.6%. Once you earn above the $152,790 cap, no further ACC levy is charged on additional income.

Self-employed and contractors pay the ACC earner's levy too, but through a different invoicing process rather than PAYE deductions. Always check ACC's website for the latest levy rates, as they're reviewed annually.

Wondering what common New Zealand wages actually look like after tax? We've built dedicated breakdown pages for four key benchmarks, each showing PAYE, ACC, KiwiSaver, and student loan deductions line by line.

These figures are as of 2025 and assume a standard 40-hour week. Each dedicated page factors in the ACC earner's levy (1.67%), optional KiwiSaver contributions, and student loan repayments where applicable, so you can see exactly what lands in your bank account rather than just headline pay.

Knowing the brackets is useful, but what you really want is a single, clear number: how much lands in your bank account each pay cycle? Tax brackets only tell part of the story — your actual take-home pay depends on ACC levies, KiwiSaver contributions, and any student loan repayments.

Rather than working through five tax bands plus deductions by hand, use our free PAYE calculator to get an instant breakdown. It's built on the current 2025/26 IRD rates (as of April 2025 — always confirm rates haven't changed) and handles every standard deduction in one go:

It takes about ten seconds and gives you a figure you can actually plan around, whether you're budgeting for rent, comparing job offers, or checking your payslip adds up.