How it's calculated
New Zealand taxes individual income in bands. Each rate applies only to the part of your income inside its band, so moving into a higher band never makes you worse off. The bands for the 2026–27 tax year (1 April 2026 to 31 March 2027) are the ones that took effect on 31 July 2024:Inland Revenue
| Income band | Rate |
|---|---|
| Up to $15,600 | 10.5% |
| To $53,500 | 17.5% |
| To $78,100 | 30% |
| To $180,000 | 33% |
| Over $180,000 | 39% |
There is no tax-free threshold: tax starts with the first dollar.
- Independent earner tax credit (IETC). $520 a year for income from $24,000 to $66,000, reducing by 13 cents for each dollar above that until it reaches zero at $70,000. You can't get it if you or your partner receive Working for Families, or you get an income-tested benefit, NZ Super or a Veteran's Pension.Inland Revenue
- ACC earners' levy. Not income tax, but charged on earnings from work at 1.75%, up to $2,741.22 a year.Inland Revenue
The formula
- Income tax = the sum, over each band, of (your income inside the band × the band's rate).
- IETC = the credit for your income if you are eligible; otherwise zero.
- Income tax after IETC = income tax − IETC.
- ACC levy = earnings × the levy rate, capped at the maximum levy.
- Income after tax = income − income tax after IETC − ACC levy.
Inland Revenue's payroll specification writes step 1 as one line per band, for example 30% × income − $7,779.50 for income from $53,501 to $78,100; the result is the same.Inland Revenue
Worked example
Income tax on $70,000 is $13,220.50, an effective rate of 20.6% once the ACC levy is added.
| Line | Amount |
|---|---|
| Taxable income | $70,000 |
| 10.5% on $0 – $15,600 | -$1,638 |
| 17.5% on $15,601 – $53,500 | -$6,632 |
| 30% on $53,501 – $78,100 | -$4,950 |
| Income tax | -$13,220 |
| ACC earners' levy | -$1,225 |
| Income after tax | $55,555 |
At $50,000 the full independent earner tax credit applies: tax after the credit is $7,138.00, compared with $7,658.00 without it.
At $250,000 the top rate applies to the income above the top threshold, and tax is $76,577.50.
Assumptions and limitations
- Taxable income for one tax year. Enter income after any deductible expenses. Losses brought forward do not count towards the IETC.
- IETC by whole months. If you were not eligible for part of the year (for example you received a benefit), the credit is worked out only for eligible months; this calculator assumes the whole year.
- ACC levy on work income only. It is not charged on interest, dividends, rent or NZ Super. Turn it off or adjust if most of your income is from investments.
- Not included: donation tax credits, Working for Families, the in-work tax credit, tax on portfolio investment entity (PIE) income at its own rates, and student loan repayments.
To see how this tax comes out of each pay, use the PAYE calculator.