How Much Tax Do I Pay in New Zealand?

Current for the 2026–27 tax year | Rates confirmed against IRD

Most Kiwis know tax comes out of their pay. What most people don't know is exactly how much, or why. If you've ever looked at your payslip and thought "where did half my money go?" — this guide is for you.

We'll walk through exactly how NZ tax works, with real numbers and real people. No jargon. No waffle.

First, the basics

New Zealand taxes your income in slices. The first slice gets taxed at a low rate. As you earn more, the extra income gets taxed at higher rates. But — and this is the bit people miss — the higher rate only applies to the part of your income that falls in that bracket. Not your whole pay.

There's no tax-free amount in New Zealand. Unlike Australia, every dollar you earn gets taxed, starting at 10.5%.

Use the TaxPop Income Tax Calculator if you want to check the exact tax on your own income as you read.

The 2026–27 Tax Brackets

These are the current rates, confirmed by Inland Revenue (IRD), for the tax year running 1 April 2026 to 31 March 2027:

These brackets have not changed since 1 April 2025, when they were last updated.

Meet Susan — a nurse earning $72,000

Susan works full-time at a hospital in Christchurch. Her salary is $72,000 a year. She wants to know how much tax she actually pays.

Here's how it works out:

• First $15,600 taxed at 10.5% = $1,638
• $15,601 to $53,500 taxed at 17.5% = $6,633
• $53,501 to $72,000 taxed at 30% = $5,550
• Total income tax = $13,821

That's an effective tax rate of about 19.2% — not 30%, even though $72,000 sits inside the 30% bracket. She only pays 30% on the slice of income above $53,500.

Susan's payslip will also show ACC (more on that below) and KiwiSaver if she's enrolled. You can model the same salary in the PAYE Calculator.

Meet Mike — a barista earning $48,000

Mike works at a café in Wellington. He earns $48,000 a year and has no student loan.

• First $15,600 at 10.5% = $1,638
• $15,601 to $48,000 at 17.5% = $5,670
• Total income tax = $7,308

His effective tax rate is about 15.2%. His marginal rate — the rate on his last dollar — is 17.5%.

Mike doesn't need to do anything. His employer handles all of this through PAYE and sends the tax straight to IRD.

What is PAYE?

PAYE stands for Pay As You Earn. If you're an employee, your employer takes your tax out before you see your pay. You don't file a tax return, you don't make payments — it just happens automatically.

Every payday your employer works out your income tax, adds the ACC levy, takes off any KiwiSaver and student loan deductions, and pays you what's left. At the end of the tax year, IRD checks everything and either sends you a refund or asks you to pay the difference.

Most employees end up square or get a small refund. The main reason people get a tax bill is using the wrong tax code.

Tax codes — get this right

Your tax code tells your employer how much tax to take out. Use the wrong one and you'll either owe IRD money at the end of the year or overpay and wait for a refund.

When you start a new job, fill in the IR330 form and pick the right code. If you're not sure, the IRD website has a simple tool to help you choose.

Meet Sarah — she has two jobs

Sarah works part-time at a supermarket (her main job, around $28,000 a year) and picks up weekend shifts at a cafe (her second job, around $10,000 a year). Her total income is $38,000.

On her main job she uses the M tax code. On her second job she uses S, because she already has a main job.

If Sarah used M on both jobs, her second employer would only withhold tax as if $10,000 was her whole income — which would be too little. She'd owe IRD at the end of the year.

With the right codes, everything balances out and she gets assessed correctly at year end.

ACC — the thing on your payslip you never asked about

ACC is the Accident Compensation Corporation. It covers you if you get injured — at home, at work, on the sports field, anywhere. In return, you can't sue for personal injury in NZ, and everyone pays a small levy.

From 1 April 2026, the ACC earner's levy is 1.75% of your pay. It applies to earnings up to $156,641 per year. The most you'll ever pay in ACC in a single year is $2,741.22.

So on top of income tax, add 1.75% to get a clearer picture of what's coming out of your gross pay. You can also check it separately with the ACC Levy Calculator.

Susan from earlier earns $72,000. Her ACC levy is $72,000 x 1.75% = $1,260 per year, or about $24 a week.

KiwiSaver — your retirement savings

KiwiSaver is a retirement savings scheme. If you're an employee and enrolled, your contributions come out of your pay automatically.

From 1 April 2026 the default rate for both employees and employers is 3.5% of your gross pay. Before that it was 3%. You can also choose to contribute 4%, 6%, 8%, or 10%.

Your employer must contribute at least 3.5% on top of what you contribute. That's free money going into your retirement savings, although employer contributions are taxed before they reach your account.

If you genuinely can't afford 3.5%, you can apply to IRD to temporarily drop back to 3% for between 3 and 12 months.

KiwiSaver doesn't reduce your tax bill, but if you contribute at least $1,042.86 between 1 July and 30 June, the government adds up to $260.72 to your account as a member tax credit — as long as you earn under $180,000.

Mike's KiwiSaver
Mike earns $48,000 and contributes at 3.5%. That's $1,680 a year from his pay. His employer contributes another $1,680 before employer contribution tax. Plus he gets the $260.72 government contribution. You can test different rates with the KiwiSaver Calculator.

Student loans

If you have a student loan, repayments are taken out of your pay automatically. The repayment rate is 12% on income above $24,128 per year (that works out to $464 a week).

So if Mike had a student loan, on his $48,000 salary he'd repay:

• $48,000 minus $24,128 = $23,872 subject to repayments
• $23,872 x 12% = $2,865 per year in student loan repayments

That comes out of his take-home pay on top of income tax and ACC. The Student Loan Calculator can show the repayment amount for your own income.

Are you self-employed?

If you work for yourself — tradie, freelancer, contractor, sole trader — the rules are different. Nobody takes your tax out for you. You manage it yourself.

Meet Dave — a self-employed plumber

Dave runs his own plumbing business in Auckland. Last year he earned $95,000 from jobs after expenses.

His income tax on $95,000 works out like this:

• First $15,600 at 10.5% = $1,638
• $15,601 to $53,500 at 17.5% = $6,633
• $53,501 to $78,100 at 30% = $7,380
• $78,101 to $95,000 at 33% = $5,577
• Total income tax = $21,228

Because his tax bill is well over $5,000, Dave has to pay provisional tax — which means he pays his tax in three instalments during the year rather than one big payment at the end. This stops the shock of a massive bill in April.

Dave's accountant told him to set aside 28% of every invoice he gets paid. That covers his income tax and leaves a buffer. He keeps it in a separate savings account and doesn't touch it.

Dave also needs to file an IR3 tax return each year by 7 July.

If Dave earns over $60,000 in turnover (not profit — total income before expenses), he also needs to register for GST, charge 15% GST on his work, and file GST returns with IRD.

The Self-Employed Tax Calculator, Provisional Tax Calculator, and GST Calculator are useful starting points if you work for yourself.

Independent Earner Tax Credit (IETC)

If you earn between $24,000 and $70,000, you don't receive Working for Families, and you're not on a main benefit, you may qualify for the IETC. It's worth up to $520 a year off your tax bill.

To get it automatically through your pay, use the ME tax code instead of M. The credit starts reducing once you earn over $66,000 and disappears at $70,000.

Mike earns $48,000 and ticks all the boxes. If he uses the ME tax code, his employer deducts up to $10 less tax per week — that's $520 back in his pocket over the year without doing a thing. You can learn more in the IETC Calculator.

Working for Families

If you have kids, Working for Families could make a real difference to what you keep each week. It's a set of tax credits paid to families with dependent children. How much you get depends on your family income, how many children you have, and how old they are.

From 1 April 2026, the In-Work Tax Credit — which is part of Working for Families — increased by $50 a week temporarily (from $97 to $147) for eligible working families. This runs until either petrol drops below $3 a litre for four consecutive weeks, or until 31 March 2027, whichever comes first.

If you're not sure whether you qualify, check with IRD or a tax agent. Many families miss out simply because they don't know it's there. The Working for Families Guide is a good place to start.

What actually comes out of your pay — a real example

Let's put it all together for Susan the nurse on $72,000, enrolled in KiwiSaver at 3.5%, with a student loan, using the M SL tax code.

That's about $936 a week in the hand from a $72,000 salary. Her employer also contributes to her KiwiSaver on top of her own contribution.

Quick comparison: different incomes, what you actually pay

These are income tax only. Add 1.75% for ACC on top.

Key dates

• NZ tax year: 1 April to 31 March
• End-of-year tax assessments for employees: IRD sends these from May each year
• IR3 return deadline for self-employed: 7 July (later if you have a tax agent)
• Provisional tax: Paid in three instalments during the year

Common questions

Does NZ have a tax-free threshold like Australia?
No. Every dollar you earn gets taxed in NZ. Your first $15,600 is taxed at 10.5% — not 0%. Australia has a $18,200 tax-free threshold. New Zealand doesn't.

Why does my take-home pay look so small?
Because PAYE, ACC, KiwiSaver and sometimes student loan repayments all come out before you see your money. If something looks off, check your tax code on your payslip — that's the most common cause.

I've just started my second job. What tax code do I use?
Use S (secondary) or SB if your second job income will be under $15,600 for the year. Don't use M on a second job — you'll end up with a tax bill at the end of the year.

I'm self-employed. When do I pay tax?
If your end-of-year tax bill is likely to be over $5,000, you'll pay provisional tax in three instalments during the year. Otherwise, you pay it all when you file your IR3 return by 7 July.

What's GST and do I need to worry about it?
GST is a 15% tax on most goods and services. If your annual turnover from self-employment goes over $60,000, you must register for GST with IRD, add 15% to your invoices, and file GST returns. It's separate from income tax.

Work out your exact take-home pay

The numbers above are estimates. Your actual take-home depends on your tax code, KiwiSaver rate, whether you have a student loan, and your pay frequency.

The fastest way to get an accurate figure is to use a calculator built around current NZ rates.

Use the TaxPop PAYE Calculator — put in your salary or hourly rate and it shows you exactly what comes out and what you keep, broken down weekly, fortnightly, or monthly.

Tax rates in this guide are sourced from Inland Revenue (IRD). Income tax brackets are current from 1 April 2025. ACC and KiwiSaver rates reflect changes that came into effect 1 April 2026. This guide is for general information only and is not tax or financial advice. For advice specific to your situation, talk to a registered NZ tax professional or accountant.