Income Tax Brackets NZ 2025/26: Rates & Take-Home Pay
If you’ve ever looked at your Payslip and wondered why the tax withheld never quite matches what you expected, you’re not alone. New Zealand’s PAYE system divides earnings into five brackets, each taxed at a different rate, and the numbers shift from one year to the next. The 2025/26 tax year brought new thresholds that put more money in pockets earning between roughly $15,600 and $78,100, according to the Inland Revenue. Below is a plain-language breakdown of what each bracket means for your paycheck.
Lowest tax rate: 10.5% on $0–$15,600 · Highest tax rate: 39% over $180,000 · Top rate trigger: $180,001+ · PAYE brackets: 5 rates for 2025/26
Quick snapshot
- IRD published the official 2025/26 brackets on 1 April 2025 (Inland Revenue)
- Whether 2026/27 brackets will shift further pending any fiscal policy updates (Inland Revenue)
- ACC earners’ levy rises to 1.75% from 1 April 2026, up from $1.67 per $100 currently (McIsaacs Tax Advisors)
- Full-year PAYE returns lodged by 31 March 2026; IRD’s official calculator can model take-home for any salary amount (Inland Revenue)
| Item | Detail |
|---|---|
| Tax year | 1 April 2025 – 31 March 2026 |
| Brackets count | 5 |
| Top rate trigger | $180,001 |
| Top marginal rate | 39% |
| ACC levy (2025/26) | $1.67 per $100 of earnings |
| KiwiSaver employee rate | 3% (standard) |
| Official IRD source | www.ird.govt.nz |
What are the tax brackets in NZ?
New Zealand applies a progressive income tax system — meaning income is taxed in slices, not at a single flat rate. Each dollar you earn falls into the bracket it crosses, and only the portion above each threshold gets the next rate (LifeCovered). The brackets for the 2025/26 tax year are:
| Income range | Tax rate |
|---|---|
| $0 – $15,600 | 10.5% |
| $15,601 – $53,500 | 17.5% |
| $53,501 – $78,100 | 30% |
| $78,101 – $180,000 | 33% |
| $180,001+ | 39% |
If you earn $53,500, you pay $1,638 on the first $15,600 at 10.5%, then $6,633 on the next $37,900 at 17.5% — a cumulative total of $8,271 (LifeCovered tax tables). Only the amount above $78,100 ever touches the 33% or 39% rates.
Current FY 2025/26 rates
The Inland Revenue confirmed these five rates on 1 April 2025, along with updated PAYE deduction tables for weekly, fortnightly, and monthly pays (Inland Revenue). The ABA Chartered Accountants also note that ESCT and FBT employer thresholds aligned with personal tax bands on the same date (ABA Chartered Accountants).
How brackets work
The term “marginal rate” trips people up. It means only the slice of income above a threshold is taxed at the higher percentage, not your entire salary. For a $70,000 earner, the 33% rate applies only to the $1,900 sitting above the $78,100 threshold — nowhere near the full $70,000 (PwC Tax Summaries).
The implication: someone jumping from $75,000 to $85,000 does not suddenly lose money overall — they keep every dollar earned, with only the excess above $78,100 taxed at 33%.
Who pays 39% tax in NZ?
Only income above $180,000 attracts the 39% top marginal rate. For every dollar between $180,001 and, say, $220,000, you hand over 39 cents to the IRD — but the rest of your income still sits in the lower brackets where it already sits (Inland Revenue).
Income threshold
The $180,001 threshold has remained unchanged since the 2024/25 year. The prior 2021-22 bracket system topped out at 33% on income above $70,000 — a dramatically lower ceiling that shows how thresholds have moved upward over successive reform cycles (LifeCovered).
Progressive tax application
New Zealand’s tax authority frames it plainly: “The rates increase as your income increases” (Inland Revenue). This progressive model means higher earners contribute a larger share in percentage terms, while lower-income earners retain more of their early dollars.
What this means: an employee on $250,000 pays 39% only on the $69,999 above $180,000 — roughly $27,300 in top-bracket tax alone. The remaining $180,000 is taxed at the lower five rates.
How much is $80,000 after tax in NZ?
A $80,000 annual salary puts earnings across the 10.5%, 17.5%, 30%, and 33% brackets. The Inland Revenue’s PAYE tables and third-party calculators show take-home pay varying based on tax code, KiwiSaver contributions, and the ACC earners’ levy (Inland Revenue PAYE calculator).
Breakdown by bracket
- First $15,600 at 10.5% = $1,638
- Next $37,900 ($15,601–$53,500) at 17.5% = $6,632.50
- Next $24,600 ($53,501–$78,100) at 30% = $7,380
- Remaining $1,900 ($78,101–$80,000) at 33% = $627
Net pay estimate
PAYE on $80,000 comes to roughly $16,278 before any ACC levy or KiwiSaver deduction (Calculate.co.nz PAYE calculator). With KiwiSaver at the standard 3% employee rate and ACC at $1.67 per $100 of earnings, net annual take-home lands near $60,000–$62,000 depending on the tax code used. IRD’s own PAYE deduction tables confirm this bracket structure (Inland Revenue IR340 PDF).
The pattern: most $80,000 earners see roughly 22–25% of gross absorbed by tax and statutory levies combined.
How much is $100,000 salary after tax in New Zealand?
At $100,000, you clear all four lower brackets and enter the 33% marginal rate with $21,900 of income above the $78,100 threshold. PAYE calculators including deductions for ACC and KiwiSaver show net annual take-home of roughly $75,000–$80,000 pre-deductions (Calculate.co.nz).
Tax calculation steps
- $1,638 (10.5% on $15,600)
- $6,632.50 (17.5% on $37,900)
- $7,380 (30% on $24,600)
- $7,227 (33% on $21,900)
- Total PAYE: $22,877.50
Take-home pay
After the ACC earners’ levy ($1.67 per $100) and standard KiwiSaver employee contribution (3%), an employee on a standard M tax code takes home approximately $74,000–$78,000 annually — before student loan repayments or any additional deductions (Calculate.co.nz PAYE breakdown). The effective tax rate (total PAYE ÷ gross income) sits around 22.9% at this salary level, substantially lower than the top marginal rate of 33%.
The catch: the further your salary pushes past $180,000, the more each additional dollar is taxed at 39% — but KiwiSaver and ACC deductions also scale up, slightly offsetting the gross impact on your bank balance.
Is NZ a highly taxed country?
By international measures, New Zealand’s tax-to-GDP ratio sits below the OECD average. The Revenue Statistics 2024 data place NZ in the lower half of developed nations for overall tax burden (ABA Chartered Accountants), which positions the country differently from commonly held perceptions of high-taxation models in Scandinavia or Western Europe.
Tax-to-GDP ratio
The OECD’s Revenue Statistics report shows New Zealand consistently under the 34% OECD average, with figures hovering around 31–33% in recent years — closer to the United States than to Germany or France on this particular metric (ABA Chartered Accountants citing OECD data). This makes NZ a relatively mid-range tax jurisdiction among developed economies.
OECD ranking
New Zealand’s combined tax revenue as a percentage of GDP ranks below the OECD mean, despite having a consumption-heavy GST of 15% on most goods and services. For individual income earners specifically, the five-bracket progressive system with a 39% ceiling sits in the lower-to-mid tier globally — higher than Singapore or the UAE, lower than Sweden, France, or Japan at top brackets (PwC Tax Summaries).
The implication: while perceptions of “high tax” in New Zealand persist — partly due to GST on everyday spending — the actual income tax burden for most New Zealanders sits comfortably below the OECD average, especially once bracket adjustments since 2024 are factored in.
| Item | 2025/26 value | Prior year reference | Notes |
|---|---|---|---|
| Bracket 1 upper threshold | $15,600 at 10.5% | $14,000 (2024/25) | Threshold increased $1,600 |
| Bracket 2 upper threshold | $53,500 at 17.5% | $48,000 (2021-22) | Steady upward movement since reform began |
| Bracket 3 upper threshold | $78,100 at 30% | $70,000 (2021-22) | $8,100 increase over prior system |
| Bracket 4 upper threshold | $180,000 at 33% | Unchanged since 2024/25 | Top of standard middle-income zone |
| Top bracket rate | 39% on income above $180,001 | 39% on income above $180,001 | Rate unchanged since introduction |
| ACC earners’ levy | $1.67 per $100 (2025/26) | Will rise to 1.75% from 1 April 2026 | GST-inclusive rate; directly reduces take-home |
| KiwiSaver employee rate | 3% standard | 3% standard | Minimum rate; employer adds 3% |
| KiwiSaver gov’t contribution | Up to $521.43/year | Up to $1,042.86/year (maximum) | 50 cents per dollar up to $1,043 invested |
| Minimum wage (2025) | $23.50/hour | $23.15/hour (2024) | Approximately $48,880 annual gross at 40 hrs/week |
| Tax year | 1 April 2025 – 31 March 2026 | N/A | Ends 31 March 2026 |
The bracket movements since 2021-22 have been meaningful: a $53,500 earner in 2021-22 paid 17.5% on income above $48,000, while that same earner in 2025/26 has a $5,500 wider first bracket. For someone on the minimum wage earning roughly $48,880, the threshold shift means more income taxed at 10.5% rather than 17.5% — a tangible improvement in effective purchasing power (ABA Chartered Accountants).
Related reading: Westpac Mortgage Rates NZ
Many earning $80k or $100k can quickly estimate net pay from these brackets using a take-home pay calculator NZ tailored for Kiwi salaries.
Frequently asked questions
What is tax code M rate?
Tax code M is the standard PAYE code for New Zealand employees with no additional tax credits, student loans, or KiwiSaver variations. It uses the progressive brackets above with no special adjustments. Employees with secondary income, student loans, or overseas income use different codes (SL, SB, ST, or the EDW code for secondary employment) (Inland Revenue tax codes).
What are New Zealand tax rates for foreigners?
Non-residents working in New Zealand typically use the IRD’s “No declaration” rate of 45% unless a proper tax code is applied — this is significantly higher than resident rates. Residents for tax purposes are taxed at the same progressive brackets as domestic workers (PwC Tax Summaries). Foreign nationals on temporary work visas should confirm their residency status with the IRD before their first payday.
What is the company tax rate NZ?
New Zealand’s company (corporate) tax rate is 28% on net profits — a flat rate applied to all businesses. This is separate from personal income tax and does not affect individual PAYE withholding. Sole traders and partnerships pass business income through to personal tax returns, where individual brackets apply (PwC Tax Summaries).
Is $70,000 a good salary in New Zealand?
At $70,000, annual PAYE sits around $14,500–$15,500 depending on tax code and KiwiSaver status, leaving roughly $54,000–$56,000 net. That places a single earner above the median salary in most regions. In Auckland or Wellington, where median household incomes run higher, $70,000 as a sole earner is workable but not generous — housing and rent are the primary variables (Talent.com NZ tax calculator).
Is $100,000 a good salary in New Zealand?
$100,000 puts a single earner in the upper quartile of individual incomes in most parts of New Zealand. With net take-home of roughly $75,000–$78,000 after standard deductions, it offers solid comfort for a one-person household and a reasonable buffer for a two-income family. In Wellington or Auckland central, however, housing costs can still compress disposable income meaningfully (Calculate.co.nz).
What is the tax rate in NZ for minimum wage?
A worker on the 2025 minimum wage of $23.50/hour earning $48,880 gross annually falls entirely within the 10.5% and 17.5% brackets. Approximate PAYE: $1,638 + $4,900 = $6,538, with ACC and KiwiSaver reducing take-home further. Monthly net on standard M code is roughly $3,400–$3,500 depending on pay frequency and deductions (Salary After Tax calculator).
“New Zealand has progressive or gradual tax rates. The rates increase as your income increases.”
— Inland Revenue (NZ Government Tax Authority)
“The adjustments to the tax brackets aim to ease the tax burden on lower to middle-income earners while ensuring higher earners contribute proportionately more.”
— ABA Chartered Accountants
For workers and job seekers across New Zealand, the practical choice is straightforward: use IRD’s official PAYE calculator before accepting any offer, factor in ACC and KiwiSaver from day one, and watch the 2026 ACC levy change that will quietly reduce take-home by a small amount from 1 April next year. The brackets are not going to change for 2025/26 — but the deductions around them will.
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