New Zealand PAYE Tax Rates 2025 & 2026
There are five PAYE income tax brackets - we explain what they are, how they work and how they affect your take home pay.
Updated 17 September 2025
There are five PAYE tax brackets for the 2025-2026 tax year: 10.50%, 17.50%, 30%, 33% and 39%. Your tax bracket depends on your total taxable income.
Our guide covers:
Our guide covers:
Our complete PAYE Tax Rates guide is supported by our friends at Lighthouse Accounting
Getting your tax rates and structures right from the start can significantly impact your take-home income and business profitability. Lighthouse Accounting specialises in helping New Zealanders understand and optimise their position within the tax system.
What sets Lighthouse Accounting apart is their ability to look beyond just the tax tables to your complete financial picture. They understand how different income types, business structures, and timing strategies can legally minimise your effective tax rate. Their advisors are aware of the subtleties that most people overlook.
They're particularly skilled at:
A conversation with Lighthouse about optimising your tax position costs nothing but could save you thousands annually.
Contact Lighthouse Accounting for Your Tax Optimisation Assessment
Important: While Lighthouse Accounting supports this educational content, all information remains independent and factual. We recommend speaking with any qualified advisor about your specific situation.
Getting your tax rates and structures right from the start can significantly impact your take-home income and business profitability. Lighthouse Accounting specialises in helping New Zealanders understand and optimise their position within the tax system.
What sets Lighthouse Accounting apart is their ability to look beyond just the tax tables to your complete financial picture. They understand how different income types, business structures, and timing strategies can legally minimise your effective tax rate. Their advisors are aware of the subtleties that most people overlook.
They're particularly skilled at:
- Tax bracket optimisation – structuring income to minimise movement into higher brackets
- Income splitting strategies – using legitimate structures to reduce overall family tax
- Timing reviews – planning when to receive income for maximum tax efficiency
- Deduction maximisation – ensuring you're claiming everything that reduces taxable income, with specialist services for property investment expenses
- Structure assessments – evaluating whether your current setup is tax-efficient
A conversation with Lighthouse about optimising your tax position costs nothing but could save you thousands annually.
Contact Lighthouse Accounting for Your Tax Optimisation Assessment
Important: While Lighthouse Accounting supports this educational content, all information remains independent and factual. We recommend speaking with any qualified advisor about your specific situation.
2025-2026 PAYE Income Tax Brackets (From 1 April 2025)
Source: IRD
Tax rate |
Taxable income bracket |
Tax owed |
10.5% |
$0 to $15,600 |
10.50% of taxable income |
17.50% |
$15,601 to $53,500 |
$1,638 plus 17.50% of the amount over $15,600 |
30.00% |
$53,501 to $78,100 |
$8,271 plus 30.00% of the amount over $53,501 |
33.00% |
$78,101 to $180,000 |
$15,651 plus 33.00% of the amount over $78,100 |
39.00% |
$180,000+ |
$49,277 plus 39.00% of the amount over $180,000 |
2024-2025 PAYE Income Tax Brackets (From 1 August 2024, Announced on 30 May 2024 in the Budget)
Source: The Post (Tax Cuts Explained)
Tax rate |
Taxable income bracket |
Tax owed |
10.5% |
$0 to $15,600 |
10.50% of taxable income |
17.50% |
$15,601 to $53,500 |
$1,638 plus 17.50% of the amount over $15,600 |
30.00% |
$53,501 to $78,100 |
$8,271 plus 30.00% of the amount over $53,501 |
33.00% |
$78,101 to $180,000 |
$15,651 plus 33.00% of the amount over $78,100 |
39.00% |
$180,000+ |
$49,277 plus 39.00% of the amount over $180,000 |
2023-2024 PAYE Income Tax Brackets (Up to 31 July 2024)
Tax rate |
Taxable income bracket |
Tax owed |
10.5% |
$0 to $14,000 |
10.50% of taxable income |
17.50% |
$14,001 to $48,000 |
$1,470 plus 17.50% of the amount over $14,000 |
30.00% |
$48,001 to $70,000 |
$7,420 plus 30.00% of the amount over $48,000 |
33.00% |
$70,001 to $180,000 |
$14,020 plus 33.00% of the amount over $70,000 |
39.00% |
$180,000+ |
$50,320 plus 39.00% of the amount over $180,000 |
- New Zealand has a simple, progressive and fair tax system - people with higher taxable incomes pay higher PAYE tax rates.
- However, being "in" a tax bracket doesn't mean you pay that PAYE income tax rate on everything you earn. The way New Zealand's tax system works means that anyone with higher taxable incomes is subject to higher income tax rates, and people with lower taxable incomes are subject to lower income tax rates.
- Tax brackets exist when the government divides your taxable income into chunks, with each chunk taxed at its corresponding rate. This means you don’t pay a single tax rate across your entire income—only the part of your income that falls into each bracket gets taxed at that rate. Here’s how it applies, with examples based on the tax brackets effective from 1 April 2025:
Example 1: $55,000 Taxable Income
With a $55,000 income, you’re in the 30% tax bracket, but you don’t pay 30% on all $55,000. Instead:
- The first $15,600 is taxed at 10.5% = $1,638.
- The next chunk, from $15,601 to $53,500, is taxed at 17.5% = $6,632.50 ($37,900 x 17.5%).
- The remaining $1,500 ($53,501 to $55,000) is taxed at 30% = $450.
- Total Tax: $1,638 + $6,632.50 + $450 = $8,720.50.
- Your effective tax rate is about 15.9%, far less than a flat 30%.
Example 2: $25,000 Taxable Income
With a $25,000 income, you’re in the 17.5% bracket, but not all $25,000 is taxed at 17.5%. Instead:
- The first $15,600 is taxed at 10.5% = $1,638.
- The next $9,400 ($15,601 to $25,000) is taxed at 17.5% = $1,645.
- Total Tax: $1,638 + $1,645 = $3,283.
Your effective tax rate is roughly 13.1%, not the full 17.5%.
Important: Our guide to bracket creep is popular with middle-income New Zealanders who want to understand what higher pay means for take-home income.
​What is a Marginal Tax Rate?
Your "marginal tax rate" is the tax rate you would pay on one more dollar of taxable income. By doing so, your tax bracket will be confirmed. For example, if you earn $75,000 and your wages go up, on every additional $1 you earn, the tax rate of 33% will be applied.
How do I get into a lower tax bracket and pay a lower PAYE?
Two common ways of reducing your final tax bill are:
For more details, the IRD has published a comprehensive guide
- Independent earner tax credit (IETC): If you're a New Zealand tax resident and you earn between $24,000 and $48,000 in a tax year, you might be able to get the independent earner tax credit (IETC).
- Tax credits for donations: You can claim 33.33 cents for every dollar you donated to charities on the approved donee list. This means if you pay a total of $500 in registered charity domains in 12 months, then your taxable income would be reduced by $500 and your tax would be reduced by $500*0.33.
For more details, the IRD has published a comprehensive guide
Frequently Asked Questions
What should I do if I've been overcharged PAYE?
If you suspect you've been overcharged PAYE:
- Review your payslip: Check for errors in your income details, tax code, and deductions.
- Contact your employer: They can correct any mistakes in subsequent payslips.
- Request a personal tax summary from IRD: This will reconcile your annual PAYE deductions and identify overpayments. You can apply for a tax refund through IRD or a third-party service if an overpayment is confirmed.
What happens if I'm on the wrong tax code?
Using the wrong tax code can lead to underpayments or overpayments of PAYE. Common scenarios include:
To fix this, the best approach is:
- Underpayment: If you're on the "M" tax code but have a secondary income, you might owe additional tax.
- Overpayment: If you've used "ST" for secondary income but earned below $14,000, you might be overpaying tax.
To fix this, the best approach is:
- Update your tax code with your employer.
- Notify IRD of the correction and check if a refund or repayment is needed.
Does PAYE cover KiwiSaver deductions?
Yes, PAYE incorporates your KiwiSaver contributions (e.g., 3%, 4%, or higher) and your employer's contributions (if applicable). These deductions are made automatically from your gross income before PAYE is calculated. You can adjust your KiwiSaver contribution rate at any time, which will impact your take-home pay. Our guide to KiwiSaver and tax explains further.
How do I calculate PAYE on irregular earnings, like commissions and a bonus?
PAYE on irregular earnings, such as commissions, is calculated similarly to bonuses using the extra pay rate method. The deduction depends on your total annual income. If you earn commission regularly, it will be averaged into your PAYE calculations over time.
Can PAYE deductions include student loan repayments?
Yes, if you have a student loan, your PAYE deductions will include student loan repayments. The standard rate is 12% of every dollar earned over the annual repayment threshold (currently around $23,000). If you're repaying your loan early or overseas, you might need to make additional payments directly to IRD.
Are there PAYE implications for self-employed or contract workers?
Self-employed individuals and contractors don't pay PAYE but are responsible for their own income tax. Contractors may have Withholding Tax (WT) deducted if they work under a contract and provide an IRD number. To avoid surprises, set aside sufficient funds for provisional tax payments.
Our complete PAYE Tax Rates guide is supported by our friends at Lighthouse Accounting
Getting your tax rates and structures right from the start can significantly impact your take-home income and business profitability. Lighthouse Accounting specialises in helping New Zealanders understand and optimise their position within the tax system.
What sets Lighthouse Accounting apart is their ability to look beyond just the tax tables to your complete financial picture. They understand how different income types, business structures, and timing strategies can legally minimise your effective tax rate. Their advisors are aware of the subtleties that most people overlook.
They're particularly skilled at:
A conversation with Lighthouse about optimising your tax position costs nothing but could save you thousands annually.
Contact Lighthouse Accounting for Your Tax Optimisation Assessment
Important: While Lighthouse Accounting supports this educational content, all information remains independent and factual. We recommend speaking with any qualified advisor about your specific situation.
Getting your tax rates and structures right from the start can significantly impact your take-home income and business profitability. Lighthouse Accounting specialises in helping New Zealanders understand and optimise their position within the tax system.
What sets Lighthouse Accounting apart is their ability to look beyond just the tax tables to your complete financial picture. They understand how different income types, business structures, and timing strategies can legally minimise your effective tax rate. Their advisors are aware of the subtleties that most people overlook.
They're particularly skilled at:
- Tax bracket optimisation – structuring income to minimise movement into higher brackets
- Income splitting strategies – using legitimate structures to reduce overall family tax
- Timing reviews – planning when to receive income for maximum tax efficiency
- Deduction maximisation – ensuring you're claiming everything that reduces taxable income, with specialist services for property investment expenses
- Structure assessments – evaluating whether your current setup is tax-efficient
A conversation with Lighthouse about optimising your tax position costs nothing but could save you thousands annually.
Contact Lighthouse Accounting for Your Tax Optimisation Assessment
Important: While Lighthouse Accounting supports this educational content, all information remains independent and factual. We recommend speaking with any qualified advisor about your specific situation.
