New Zealand Income Tax Rates 2026-27: PAYE Bands
NZ income tax bands 2026-27
| Annual income band | Marginal rate |
|---|---|
| First $15,600 | 10.5% |
| $15,601 to $53,500 | 17.5% |
| $53,501 to $78,100 | 30% |
| $78,101 to $180,000 | 33% |
| Above $180,000 | 39% |
New Zealand has no tax-free threshold: the first dollar of income is taxed at 10.5%. There are also no personal allowances or credits built into the basic PAYE calculation, although the Independent Earner Tax Credit (IETC) applies for incomes between $24,000 and $70,000 when you use tax code ME. The ACC earners levy of 1.75% applies on top of income tax on earnings up to $156,641.
Effective rates at key incomes
| Annual gross | Income tax | Effective rate | Marginal rate |
|---|---|---|---|
| $40,000 | $5,908.00 | 14.8% | 22.8% |
| $60,000 | $10,220.50 | 17.0% | 35.3% |
| $80,000 | $16,277.50 | 20.3% | 38.3% |
| $100,000 | $22,877.50 | 22.9% | 38.3% |
| $150,000 | $39,377.50 | 26.3% | 38.3% |
Figures are income tax only. KiwiSaver (3.5% default from April 2026) and the ACC levy (1.75%) also reduce take-home. Use the NZ PAYE calculator for the full deduction breakdown.
How PAYE withholding works
Your employer uses your tax code (M for primary income, ME for primary income with IETC eligibility, S for secondary income) to withhold PAYE from each pay run. The withholding is calculated on an annualised basis: a weekly payslip is multiplied by 52 to estimate annual income, then the appropriate fraction of the annual tax is withheld. Inland Revenue then squares up at year-end using the individual's actual annual income. Most employees receive a small refund if their income was steady throughout the year.
No-filing rule for most employees
Unlike many countries, New Zealand does not require wage and salary earners with a single employer to file an annual income tax return. Inland Revenue uses the PAYE data from your employer and issues a tax summary. If the result shows a refund, it is paid to your bank account automatically. If it shows a bill, you receive a notice. You only need to file an IR3 return if you have income not subject to PAYE (such as rental income, business income or overseas income).
Frequently asked questions
Do I pay NZ income tax monthly or annually?
New Zealand uses a Pay As You Earn (PAYE) system. Your employer deducts income tax from every pay run using your tax code. For most employees with a single job and the correct tax code this means no year-end filing is required. If your circumstances change (second job, investment income, incorrect tax code) you may need to file an IR3 return or a personal tax summary at year-end.
What is the NZ personal tax summary?
Inland Revenue automatically calculates a personal tax summary (PTS) for most wage and salary earners after the tax year ends on 31 March. If PAYE was over-deducted you receive a refund automatically. If it was under-deducted you are issued an amount to pay. About 60% of wage earners receive a refund; the rest break even or have a small bill.
Are New Zealand income tax rates the same as in Australia?
No. The two countries have different brackets and different thresholds. Australia's top rate kicks in above AUD 190,000 (2025-26 threshold); New Zealand's 39% top rate applies above NZD 180,000 from the 2021-22 year onwards. The effective rates differ significantly at most income levels due to different bracket structures.
Source: Inland Revenue IR341 (2026-27 tax rates, unchanged from 2025-26). Last updated 2026-11-04.