New Zealand’s income tax brackets shifted on 1 April 2025, with the lowest rate now applying up to $15,600 — $1,600 higher than 2024. If you’re earning $70,000 or $100,000 a year, the after-tax difference between old brackets and new ones can be meaningful.

4 related posts

Lowest rate: 10.5% up to $15,600 · Highest rate: 39% over $180,000 · Tax year start: 1 April 2025 · Brackets count: 5 · 39% threshold: $180,001+

Quick snapshot

1Confirmed facts
2What’s unclear
  • Specific 2026/2027 adjustments have not yet been announced by IRD
  • ACC levy rates for 2025/26 require separate verification on IRD’s levy calculator
  • Whether further bracket shifts will occur before 2027 is not publicly confirmed
3Timeline signal
4What’s next
  • PAYE deductions updated from 1 April reflect new brackets immediately
  • PIE rates now aligned with personal tax bands — investors in managed funds see matching changes
  • Fringe Benefit Tax thresholds updated alongside personal rates

New Zealand operates a progressive PAYE (Pay As You Earn) system, taxing each dollar of income at the marginal rate that applies to that slice of earnings (LifeCovered). This means you never pay 33% on your entire income just because you crossed into the 33% bracket — you only pay that rate on the portion above $78,100.

Label Value
Tax year 2025/2026 from 1 April 2025
Brackets 5 progressive rates
Top rate 39% over $180,000
Source Inland Revenue

What are the tax rates in NZ in 2025?

The 2025/2026 tax year brought five marginal rates ranging from 10.5 cents in the dollar to 39 cents, with each threshold shifting upward compared to 2024/2025 (MoneyHub NZ). The government increased these brackets to reduce the tax burden on lower and middle-income earners (ABA Chartered Accountants).

Income thresholds

The first meaningful shift happened at the lowest bracket: the 10.5% rate previously applied up to $14,000, but from 1 April 2025 it now stretches to $15,600 (Inland Revenue). That $1,600 expansion matters for anyone earning above $14,000 — it means more income sits in the lowest tax bracket before moving up.

  • 10.5% on income from $0 to $15,600
  • 17.5% on $15,601 to $53,500 — previously this bracket ran from $14,001 to $48,000, meaning the upper limit increased by $5,500 (Salaries.co.nz)
  • 30% on $53,501 to $78,100 — previously the 30% bracket ended at $70,000 (Salaries.co.nz)
  • 33% on $78,101 to $180,000
  • 39% on income over $180,000 (Inland Revenue)
The upshot

The 30% bracket’s upper limit moved from $70,000 to $78,100 — a gain of $8,100 — meaning someone earning exactly $78,100 now pays $0 more tax on that income compared to the previous year. Those bracket shifts compound into real take-home differences.

PAYE brackets overview

The tax year runs from 1 April to 31 March each year (Inland Revenue). These are the official PAYE rates Inland Revenue sets for individual income tax, not to be confused with company tax (which stays at 28%) (BDO New Zealand).

The official rate schedule shows income taxed in slices, with rates increasing as each threshold is crossed. Inland Revenue publishes the exact structure, and the pattern is straightforward: each dollar earned above a bracket boundary enters the next rate band.

Rate Income range Source
10.5% $0 – $15,600 Inland Revenue
17.5% $15,601 – $53,500 Inland Revenue
30% $53,501 – $78,100 Salaries.co.nz
33% $78,101 – $180,000 Salaries.co.nz
39% $180,001+ Inland Revenue

“From 1 April 2025: $0 – $15,600 at 10.5%, $15,601 – $53,500 at 17.5%, $53,501 – $78,100 at 30%, $78,101 – $180,000 at 33%, and income above $180,000 at 39%.”

— Inland Revenue, New Zealand’s Government Tax Authority (Inland Revenue)

Who pays 39% tax in NZ?

The 39% marginal rate is New Zealand’s highest personal income tax bracket, applying only to income earned above $180,000 (Inland Revenue). This rate has remained unchanged in the 2025/2026 brackets.

39% threshold details

Someone earning exactly $180,000 pays 33% on every dollar from $78,101 onward — they do not hit the 39% bracket yet. The 39% rate kicks in only on the dollar above $180,000. For a salary of $200,000, only the $19,999 above the threshold is taxed at 39%, not the entire $200,000.

Key distinction

Marginal rates apply to each dollar above the threshold, not to your total income. This is a common misconception that leads people to think earning $180,001 means losing significant net income — it does not.

Examples of high earners

Medical specialists, senior corporate executives, partners in professional services firms, and some technology sector leaders commonly cross the $180,000 threshold (PwC Tax Summaries). Trustee income — income earned through a family trust — has been taxed at 39% since the 2024/25 income year (PwC Tax Summaries).

The implication for workers approaching this threshold is clear: the 39% rate targets only the slice above $180,001, leaving the rest of the income taxed at 33% or lower.

How much is $100,000 salary after tax in New Zealand?

Working backwards through the brackets helps illustrate how progressive taxation actually functions in practice. A $100,000 salary in New Zealand breaks across three brackets (LifeCovered).

Breakdown by brackets

For a $100,000 salary, the progressive calculation works as follows:

  • First $15,600 at 10.5% = $1,638
  • $15,601 to $53,500 at 17.5% = $6,633 cumulative
  • $53,501 to $78,100 at 30% = $7,380 cumulative
  • $78,101 to $100,000 at 33% = additional tax on the $21,899 in this band

The cumulative tax on $78,100 income is $15,651 (LifeCovered). Adding the 33% portion on the remaining $21,900 brings total PAYE to roughly $22,878, before ACC levies are applied.

Net take-home estimate

After PAYE tax of approximately $22,878, a $100,000 salary leaves roughly $77,122 before ACC and other deductions. ACC levies for the 2025/26 year vary based on industry and hours worked — the ACC levy is separate from, and added on top of, PAYE income tax. The OECD measured New Zealand’s tax wedge for the average single worker at 20.8% in 2024 (OECD Taxing Wages 2025), which factors in both personal income tax and employee social contributions.

The trade-off

Earning $100,000 puts you in the 33% bracket, but only on income above $78,100. Roughly 78% of your income still falls into the lower two brackets — the marginal rate doesn’t define your effective tax rate.

The pattern is unmistakable: higher earners benefit most from bracket expansion because more of their income stays in lower-rate bands.

How much is $70,000 a year after tax in New Zealand?

A $70,000 annual salary sits right at the top of the 30% bracket for the 2025/2026 tax year, making it a useful reference point for understanding where typical Kiwi earners land on the bracket ladder.

Tax withheld example

At $70,000, the progressive tax calculation runs:

  • $0 to $15,600 at 10.5% = $1,638
  • $15,601 to $53,500 at 17.5% = $6,633 total in this band
  • $53,501 to $70,000 at 30% = $4,950 in this band

Total PAYE tax comes to approximately $13,221 before ACC levies. The maximum tax accumulated in the 17.5% bracket alone is $6,633 (LifeCovered), bringing the cumulative tax through that bracket to $8,271.

Annual net pay

A $70,000 salary yields roughly $56,779 after PAYE, before the ACC levy is deducted. For a $50,000 salary, the ACC levy runs approximately $695 per year (Talent.com), though the exact figure depends on your industry classification and hours worked.

Watch for outdated sources

At least one online source currently still lists the 10.5% threshold at $14,000 rather than $15,600 — this reflects the 2024/2025 brackets and should not be used for 2025/2026 calculations (Tohme Accounting).

Is NZ a highly taxed country?

Compared to other developed nations, New Zealand’s top personal rate of 39% sits somewhere in the middle of the pack, while its GST rate of 15% is relatively high by global standards (BDO New Zealand).

NZ rates vs global

New Zealand’s personal top rate of 39% falls below Australia’s top rate of 45% (on income above AUD $180,001) but above the United Kingdom’s basic rate of 20%. The gap between New Zealand’s personal top rate of 39% and its company rate of 28% represents a structural difference that creates incentives around how income is earned and held (BDO New Zealand).

Rate type New Zealand Source
Top personal rate 39% Inland Revenue
Company rate 28% BDO New Zealand
GST rate 15% BDO New Zealand
Tax wedge (avg single worker) 20.8% OECD

Effective tax burdens

The OECD’s Taxing Wages 2025 report found the tax wedge for the average New Zealand single worker decreased by 0.3 percentage points to 20.8% in 2024 (OECD Taxing Wages 2025). The tax wedge measures the difference between total labour cost to the employer and net take-home pay, including both income tax and employee social security contributions.

The catch

New Zealand’s GST at 15% adds to the effective tax burden on consumption, which tends to hit lower-income households proportionally harder than income tax alone suggests. But for most wage earners, the headline personal rates are what show up in their PAYE calculations each pay period.

“The tax wedge for the average single worker in New Zealand decreased by 0.3 percentage points to 20.8% in 2024.”

— OECD Taxing Wages 2025 (OECD)

How do NZ tax brackets work?

New Zealand’s PAYE system operates on a cumulative basis, meaning each pay period your employer withholds tax based on your expected annual income, but the brackets apply progressively so that each slice of income is taxed at its own rate (LifeCovered).

Progressive calculation

Your employer calculates PAYE by applying each marginal rate to the corresponding slice of your income. There is no situation where earning $1 more pushes your entire income into a higher bracket — only the additional dollar is taxed at the higher rate. This is the defining feature of progressive income tax systems.

ESCT (Employer Superannuation Contribution Tax) thresholds are aligned with the personal tax bands from 1 April 2025, with the 10.5% ESCT rate applying up to $18,720 for the 2025/26 year (BDO New Zealand). Portfolio Investment Entity (PIE) rates are also aligned with personal tax bands from the same date (ABA Chartered Accountants), meaning investors in managed funds see tax rates that match their personal marginal rate.

When do NZ tax brackets change in 2025?

The 2025/2026 brackets took effect on 1 April 2025, marking the start of the new tax year which runs to 31 March 2026 (Inland Revenue). The transitional bracket changes first appeared partway through the previous tax year, beginning 31 July 2024 (ABA Chartered Accountants), but the full-year thresholds now apply as the standard.

Interest rates on tax overpayments and underpayments were adjusted effective 16 January 2025 (ABA Chartered Accountants). Fringe Benefit Tax thresholds were updated alongside the personal rate changes (ABA Chartered Accountants).

Bottom line: New Zealand’s 2025 tax brackets shifted meaningfully upward, giving lower and middle-income earners more income taxed at lower rates. The 10.5% bracket now covers $1,600 more than it did in 2024/2025. Kiwis earning $70,000 will see their tax on the top slice drop from what it would have been under old brackets, while those at $100,000 benefit from having $8,100 more income sitting in the 30% bracket instead of the 33% band. Anyone earning above $180,000 pays 39% only on the portion above that threshold. Use Inland Revenue’s official calculator for exact figures specific to your situation.

Related reading: Current Personal Loan Rates NZ · Home Loan Rates NZ Compare

Additional sources

hnry.co.nz

Don't miss these

Frequently asked questions

What are the NZ tax brackets for 2025/2026?

The 2025/2026 PAYE brackets are: 10.5% on $0–$15,600, 17.5% on $15,601–$53,500, 30% on $53,501–$78,100, 33% on $78,101–$180,000, and 39% on income over $180,000. These apply from 1 April 2025.

How do NZ tax brackets work?

New Zealand uses a progressive PAYE system where each dollar of income is taxed at the marginal rate applying to that income slice. You only pay the higher rate on income above each bracket threshold, not on your entire income.

What income pays 30% tax in NZ?

The 30% bracket applies to income from $53,501 to $78,100 for the 2025/2026 tax year. Income above $78,100 moves into the 33% bracket.

When do NZ tax brackets change in 2025?

The full-year 2025/2026 brackets took effect on 1 April 2025. Transitional rates were introduced partway through the 2024/2025 year starting 31 July 2024.

What is the average salary in NZ 2025?

Average salary data varies by source and industry. The OECD measured New Zealand’s tax wedge using the average single worker, but specific average salary figures are published separately by Statistics NZ and other agencies.

Is 50k a good salary in NZ?

Whether $50,000 is a good salary depends on location, household situation, and cost of living. At $50,000, your income falls in the 17.5% and 30% brackets. After PAYE tax of roughly $7,600, plus ACC levies, take-home pay is approximately $42,000.

What jobs pay $200,000 a year in NZ?

Senior medical specialists, partners at major law or accounting firms, C-suite executives at large corporates, and some technology sector leaders are among those who commonly earn above $200,000 and thus pay 39% on income above $180,000.