New Zealand taxes personal income in five bands. The rates for the 2026–27 tax year, which runs from 1 April 2026 to 31 March 2027, are the same as the year before: the thresholds that took effect on 31 July 2024 now apply for a full second year.
This guide sets out the brackets, shows how marginal rates work with real figures, and covers the two things that sit alongside income tax for most people: the independent earner tax credit (IETC) and the ACC earners’ levy. It ends with the secondary tax codes for second jobs. The NZ income tax calculator works out the figures for any income.
The five income tax rates for 2026–27
| Income for the year | Rate on that part |
|---|---|
| Up to $15,600 | 10.5% |
| $15,600 to $53,500 | 17.5% |
| $53,500 to $78,100 | 30% |
| $78,100 to $180,000 | 33% |
| Over $180,000 | 39% |
Inland Revenue publishes these rates as “for each dollar of income”: each rate applies only to the dollars inside its band.Inland Revenue There is no tax-free threshold, so tax starts on the first dollar you earn. The rates are based on your total income for the year from all sources, including salary or wages, self-employment, interest, rent and some overseas income.
Most employees never see these rates directly, because PAYE is deducted from each pay using your tax code. But they decide how much tax you pay over the year, and any difference between your PAYE and your actual tax is settled after 31 March.
How marginal rates work
Take an income of $80,000. It reaches into the fourth band, but only the dollars above $78,100 are taxed at 33%. Everything below is taxed at the lower rates, band by band:
| Line | Amount |
|---|---|
| Taxable income | $80,000 |
| 10.5% on $0 – $15,600 | -$1,638 |
| 17.5% on $15,601 – $53,500 | -$6,632 |
| 30% on $53,501 – $78,100 | -$7,380 |
| 33% on $78,101 – $180,000 | -$627 |
| Income tax | -$16,277 |
| ACC earners' levy | -$1,400 |
| Income after tax | $62,323 |
The total income tax is $16,277.50. Your marginal rate, the rate on your next dollar, is 33%, but your effective rate, including the ACC levy, is only 22.1% of your income.
This is why moving into a higher band never leaves you worse off. A pay rise that takes you past $78,100 means the extra dollars are taxed at the higher rate, while the tax on the rest of your income stays exactly as it was. On $78,000, income tax is $15,620.50; on $79,000 it is $15,947.50. Most of the extra $1,000 is still yours.
How the thresholds changed recently
The current thresholds took effect on 31 July 2024, when the lower three thresholds were raised. The top threshold of $180,000 and the five rates themselves stayed the same. Because the change came part-way through the 2024–25 tax year, Inland Revenue used blended “composite” rates for that year only, so tables for 2024–25 look different from the ones above.Inland Revenue
From 1 April 2025 the new thresholds have applied for whole tax years, and nothing changed for 2026–27. Tax tables and calculators made for earlier years use the old thresholds, so check which year a figure is for before you rely on it.
Income tax at common incomes
These figures are for a full year of income in 2026–27, before any tax credits. The total includes the ACC earners’ levy, which applies to earnings from work.
| Income | Income tax | ACC earners’ levy | Total | Effective rate | Marginal tax rate |
|---|---|---|---|---|---|
| $20,000 | $2,408.00 | $350.00 | $2,758.00 | 13.8% | 17.5% |
| $40,000 | $5,908.00 | $700.00 | $6,608.00 | 16.5% | 17.5% |
| $60,000 | $10,220.50 | $1,050.00 | $11,270.50 | 18.8% | 30% |
| $70,000 | $13,220.50 | $1,225.00 | $14,445.50 | 20.6% | 30% |
| $100,000 | $22,877.50 | $1,750.00 | $24,627.50 | 24.6% | 33% |
| $150,000 | $39,377.50 | $2,625.00 | $42,002.50 | 28% | 33% |
| $200,000 | $57,077.50 | $2,741.22 | $59,818.72 | 29.9% | 39% |
Even at $200,000, the effective rate is well below the top rate of 39%, because the first $180,000 is taxed at the lower rates. To see what these amounts mean for each payday, including KiwiSaver, see take-home pay at common salaries.
The independent earner tax credit (IETC)
The IETC is a tax credit for people on low to middle incomes who don’t get other help from the government. It’s worth $520 a year if your income is between $24,000 and $66,000. Above that, it reduces by $0.13 for every dollar of extra income, and it is gone by $70,000.Inland Revenue
You can’t get it if you or your partner receive Working for Families, or you receive an income-tested benefit, NZ Super or a Veteran’s Pension. Inland Revenue works the IETC out on whole months, so getting one of these payments at any time in a month removes the credit for that month.
| Income | IETC for the year | Income tax after the IETC |
|---|---|---|
| $30,000 | $520.00 | $3,638.00 |
| $50,000 | $520.00 | $7,138.00 |
| $68,000 | $260.00 | $12,360.50 |
If you earn salary or wages, you get the credit during the year by using tax code ME instead of M with your main employer. If you’re eligible but use M, you can still get it after the end of the tax year. Between $66,000 and $70,000 the shrinking credit adds to your marginal rate, so each extra dollar of pay keeps less than the tax bands alone suggest.
The ACC earners’ levy
The ACC earners’ levy pays for cover for injuries that happen outside work. For 2026–27 it is 1.75% of your earnings, up to maximum earnings of $156,641. The most anyone pays is $2,741.22, which is why the levy is the same at $200,000 as at any income above the cap.Inland Revenue
The levy is not income tax, but for employees it’s deducted along with tax in your PAYE, so your payslip usually shows a single PAYE amount. It applies to earnings from work, not to interest, dividends or rent. The rate has gone up each year recently, and Inland Revenue has already published a higher rate for 2027–28.
Secondary tax codes
If you have more than one job, your main job uses M or ME and each other job uses a secondary code. A secondary code takes a flat rate from every pay, because the first bands of your income have already been taxed in your main job. You choose the code by your estimated total income from all sources for the year:Inland Revenue
| Total income from all sources | Secondary code | Tax rate before ACC levy |
|---|---|---|
| Up to $15,600 | SB | 10.5% |
| $15,601 to $53,500 | S | 17.5% |
| $53,501 to $78,100 | SH | 30% |
| $78,101 to $180,000 | ST | 33% |
| $180,001 and over | SA | 39% |
The ACC earners’ levy is added on top of each rate. Say your main job pays $60,000 and a weekend job pays $15,000. Your total of $75,000 falls in the SH band, so the weekend job uses SH and pays $197.02 a week after PAYE, with no KiwiSaver. Picking a lower code to keep more of each pay usually just leaves you with a tax bill after 31 March.
Other tax codes you might see
You give your employer your tax code on the IR330 tax code declaration when you start a job.Inland Revenue Apart from M, ME and the secondary codes:
- SL is added to your code if you have a student loan (M SL, ME SL, S SL and so on). See NZ student loan repayments.
- ND is the code your employer uses if you don’t give them a declaration. They must then deduct tax at the non-declaration rate, a flat rate far higher than your normal rate, until you hand in an IR330.
- A tailored tax code is one Inland Revenue gives you, on application, if the standard codes would leave you with a large refund or bill every year.
If Inland Revenue sees you using the wrong code, for example M in two jobs at the same time, it can ask your employer to change it.
What these rates don’t cover
The calculator and the tables above cover income tax, the IETC and the ACC earners’ levy. They don’t include other tax credits, such as donation tax credits or Working for Families. They also leave out your KiwiSaver contributions and student loan repayments, which come out of your pay but aren’t tax.
If you’re self-employed, the same rates apply to your profit for the year, but no PAYE is deducted. You pay through your tax return and, once your tax bill is large enough, through provisional tax during the year.Inland Revenue Companies pay a flat rate instead; see NZ company tax and imputation.
Work out your income tax
Enter your taxable income for the year. Turn off the IETC if you get Working for Families, a benefit or NZ Super, and turn off the ACC levy for income that isn’t from work.
$13,220.50
- Income tax before credits
- $13,220.50
- Independent earner tax credit
- $0.00
- ACC earners' levy
- $1,225.00
- Total tax and levy
- $14,445.50
- Income after tax
- $55,555
- Effective rate
- 20.6%
- Marginal tax rate
- 30%
- The ACC earners' levy applies to earnings from work. If part of your income is interest, dividends or rent, the levy here is overstated.
- Rates for the 2026–27 tax year (1 April 2026 – 31 March 2027) from Inland Revenue. Other credits (donations, Working for Families) are not included.
Income tax: $13,220.50 on $70,000 for 2026–27
Show the breakdown
| Line | Amount |
|---|---|
| Taxable income | $70,000 |
| 10.5% on $0 – $15,600 | −$1,638 |
| 17.5% on $15,601 – $53,500 | −$6,633 |
| 30% on $53,501 – $78,100 | −$4,950 |
| Income tax | −$13,221 |
| ACC earners' levy | −$1,225 |
| Income after tax | $55,555 |
- Income after tax$55,55579%
- Income tax$13,22119%
- ACC earners' levy$1,2252%
For what these rates mean for each pay, use the PAYE calculator, or read the New Zealand take-home pay guide for every deduction on a payslip.
