Tax Debt Statistics New Zealand 2025: $9.3 Billion Owed to IRD
New Zealand's overdue tax debt has hit $9.3 billion - this is money assessed by IRD that has passed its payment date and remains unpaid. GST debt alone exceeds $3.2 billion, employer activities debt (PAYE) has grown 153% since 2020, and over 527,000 taxpayers are in arrears. Our guide analyses official IRD data to show what's owed, who owes it, and how fast it's growing.
Updated 13 March 2026
Key Findings
The Bigger Picture
To outline what's important, our guide covers:
Know This First: Why is tax debt growing so fast?
Data Sources
All data is sourced from Inland Revenue's tax and entitlements debt dataset, published 31 October 2025 (data as at 30 June 2025). This dataset excludes child support, student loans and small business cashflow loans. From the 2025 financial year, Working for Families is included within tax credits and entitlements.
Are you a business owner with tax debt? Our definitive guide explains how tax debt builds up, what IRD can and can't do, your options for repayment and penalty relief, and when to get professional help.
- Total tax debt: $9.29 billion outstanding as at 30 June 2025 (this is the most recent IRD data, and excludes child support, student loans and small business cashflow loans)
- GST debt: $3.26 billion - 35% of all tax debt and the single largest category
- Employer activities debt (PAYE etc): $2.03 billion - up 153% since September 2020
- Individual income tax debt: $2.30 billion - up 126% since September 2020
- 527,400 taxpayers owe money to IRD (June 2025)
- Companies owe $5.71 billion (61% of all tax debt); individuals owe $3.11 billion (33%)
- Half the debt is old debt: $4.63 billion (50%) is over two years old
- Year-on-year growth: +16.9% from June 2024 ($7.94B) to June 2025 ($9.29B)
- Five-year growth: +123% from September 2020 ($4.16B) to June 2025 ($9.29B)
The Bigger Picture
- Tax debt has more than doubled in five years, from $4.16 billion (September 2020) to $9.29 billion (June 2025). That is 123% growth in a period where inflation was approximately 25-30% and population grew roughly 5%. The growth in tax debt has far outpaced both.
- GST and employer activities (PAYE) account for $5.29 billion, or 57% of all tax debt. These are trust monies, meaning they were collected from customers and employees respectively and should have been passed to IRD. The scale of this unpaid trust money is a significant concern.
- Companies owe nearly twice as much as individuals, with $5.71 billion vs $3.11 billion. Company tax debt has grown 132% since September 2020, compared to 116% for individuals.
- The number of taxpayers with debt fluctuates seasonally (peaking at filing dates) but the trend is upward. June 2025's 527,400 compares with 418,600 in June 2021 - a significant increase given June 2021 was during the pandemic.
- Old debt is accumulating: Debt over two years old has grown from $1.95 billion (September 2020) to $4.63 billion (June 2025), a 137% increase. This suggests that many tax debts are not being resolved and are instead compounding with penalties and interest.
To outline what's important, our guide covers:
- Current Tax Debt Snapshot (June 2025)
- Tax Debt by Product: What New Zealanders Owe
- Tax Debt by Customer Type: Companies vs Individuals
- Tax Debt by Age: How Long Has It Been Owed?
- Historical Tax Debt (2020 to 2025): The Full Picture
- Frequently Asked Questions
Know This First: Why is tax debt growing so fast?
- Several factors are contributing. High interest rates from 2022-2024 squeezed business cashflow, making it harder to meet tax obligations on time.
- Once debt arises, IRD penalties and Use-of-Money Interest compound daily, rapidly increasing the balance.
- Many businesses also underestimated provisional tax during high-inflation years, leading to unexpected terminal tax bills.
- And the economic slowdown has reduced revenue for many businesses while costs remain elevated.
Data Sources
All data is sourced from Inland Revenue's tax and entitlements debt dataset, published 31 October 2025 (data as at 30 June 2025). This dataset excludes child support, student loans and small business cashflow loans. From the 2025 financial year, Working for Families is included within tax credits and entitlements.
- Data current as at March 2026
Are you a business owner with tax debt? Our definitive guide explains how tax debt builds up, what IRD can and can't do, your options for repayment and penalty relief, and when to get professional help.
Current Tax Debt Snapshot (June 2025)
New Zealand's total tax debt stands at $9.29 billion as at 30 June 2025. To put that in context, it is equivalent to roughly 2% of New Zealand's GDP, or approximately $1,787 for every person in the country. For the estimated 550,000+ businesses operating in New Zealand, the average works out to approximately $16,900 per business, though in practice, debt is concentrated among a smaller number of taxpayers with larger liabilities.
| Tax Type | Amount ($M) | Share | YoY Change |
|---|---|---|---|
| GST | $3,259.8 | 35.1% | +14.9% |
| Income Tax - Individuals | $2,299.1 | 24.7% | +12.5% |
| Employer Activities (PAYE etc) | $2,027.6 | 21.8% | +33.9% |
| Income Tax - Non-Individuals | $1,209.1 | 13.0% | +9.9% |
| Tax Credits & Entitlements | $322.9 | 3.5% | +8.2% |
| Other Tax | $171.4 | 1.8% | -2.6% |
| Total Tax Debt | $9,289.8 | 100% | +16.9% |
Source: Inland Revenue administrative data. YoY compares June 2024 to June 2025. Employer Activities includes PAYE, KiwiSaver employer/employee contributions, ESCT, student loan employer deductions and child support employer deductions.
Know This: GST debt ($3.26B) and employer activities debt ($2.03B) together make up 57% of all tax debt. These are trust monies - GST is charged to customers and held by the business, while PAYE is deducted from employees' wages. When businesses fail to pass these funds to IRD, it means money that was never theirs to spend has been used elsewhere. IRD treats these categories more seriously than income tax debts, and directors can face personal liability for unpaid PAYE and GST.
Know This: GST debt ($3.26B) and employer activities debt ($2.03B) together make up 57% of all tax debt. These are trust monies - GST is charged to customers and held by the business, while PAYE is deducted from employees' wages. When businesses fail to pass these funds to IRD, it means money that was never theirs to spend has been used elsewhere. IRD treats these categories more seriously than income tax debts, and directors can face personal liability for unpaid PAYE and GST.
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Christopher Walsh, the Founder of MoneyHub, Shares His Views on Tax Debt:
"The headline number is $9.3 billion, but what concerns me most is what sits behind it. I read about IRD tax debt in the news all the time - and it appears to be getting worse. Over 527,000 taxpayers are in arrears with IRD. Some of those are businesses that hit a rough patch during the rate rises and never caught up. Some are sole traders who underestimated a provisional tax payment and watched penalties turn a manageable shortfall into something much bigger. And some are people who simply stopped opening the letters because the numbers felt overwhelming. The fact that employer activities debt (PAYE) grew 33.9% in a single year tells me that a growing number of businesses are struggling to meet their most basic obligations to their employees and to IRD. What frustrates me is that options exist, but too many people don't know about them or assume they've left it too late:
If you're reading this and you owe tax, the worst thing you can do is nothing. IRD's powers are real - they can take money from your bank account, redirect payments from your customers, and pursue directors personally. But they are also willing to work with people who engage early and come with a realistic plan. The data in this guide is not just numbers on a page. It represents hundreds of thousands of New Zealanders under financial pressure. If that includes you, start with our tax debt guide for business owners, which explains your options in plain language. And if the situation is complex, get professional advice before IRD makes the next move for you". |
Christopher Walsh
MoneyHub Founder |
Tax Debt by Product: What New Zealanders Owe
We break what's owed where by category:
1) GST Debt: $3.26 Billion
Our View: $3.26 billion in unpaid GST means that a significant amount of money collected from New Zealand consumers has not reached the government. This is not an abstract number. It represents tax that has already been charged and paid by customers and was held by businesses that did not pass it on. For any business carrying GST debt, addressing it early is critical. Our guide to tax debt for business owners explains the options.
2) Employer Activities Debt (PAYE etc): $2.03 Billion
Know This: Employer activities debt grew 33.9% in a single year, the fastest of any category. If your business is behind on PAYE, this is a personal liability issue, not just a business one. Directors can be pursued individually for unpaid PAYE, and IRD has broad powers to recover these debts.
3) Individual Income Tax Debt: $2.30 Billion
4) Non-Individual Income Tax Debt: $1.21 Billion
5) Tax Credits & Entitlements Debt: $322.9 Million
6) Other Tax: $171.4 Million
Are you a business owner with tax debt? Our definitive guide explains how tax debt builds up, what IRD can and can't do, your options for repayment and penalty relief, and when to get professional help.
1) GST Debt: $3.26 Billion
- GST is the single largest category of tax debt. It has grown from $1.44 billion in September 2020 to $3.26 billion in June 2025, an increase of 127%. GST debt has consistently accounted for roughly a third of all tax debt throughout the period.
- The nature of GST debt makes it particularly problematic. Businesses collect GST from customers on every sale. That money does not belong to the business. When cashflow is tight, some businesses use GST funds for wages, rent or supplier payments, intending to catch up later. The problem is that IRD penalties and Use-of-Money Interest compound quickly, and what started as a timing issue becomes a structural debt.
Our View: $3.26 billion in unpaid GST means that a significant amount of money collected from New Zealand consumers has not reached the government. This is not an abstract number. It represents tax that has already been charged and paid by customers and was held by businesses that did not pass it on. For any business carrying GST debt, addressing it early is critical. Our guide to tax debt for business owners explains the options.
2) Employer Activities Debt (PAYE etc): $2.03 Billion
- Employer activities debt has seen the fastest growth of any category, rising 153% from $801 million in September 2020 to $2.03 billion in June 2025. This category includes PAYE, KiwiSaver employer and employee contributions, employer superannuation contributions tax (ESCT), and student loan and child support employer deductions.
- PAYE debt is treated with particular severity by IRD. Like GST, it is money deducted from employees' wages and held in trust. Directors of companies that fail to remit PAYE can be held personally liable. The year-on-year growth of 33.9% (from $1.51B in June 2024 to $2.03B in June 2025) is the highest of any tax type and signals increasing financial stress among employers.
Know This: Employer activities debt grew 33.9% in a single year, the fastest of any category. If your business is behind on PAYE, this is a personal liability issue, not just a business one. Directors can be pursued individually for unpaid PAYE, and IRD has broad powers to recover these debts.
3) Individual Income Tax Debt: $2.30 Billion
- Individual income tax debt has more than doubled since September 2020, growing from $1.02 billion to $2.30 billion. Much of this relates to provisional tax shortfalls, unexpected terminal tax bills, and self-employed individuals who underestimate their tax liability during the year. The 2023 tax year (assessments landing in the 2023-2024 period) saw a sharp jump, with individual income tax debt rising from $1.12 billion in March 2023 to $1.79 billion by September 2023.
4) Non-Individual Income Tax Debt: $1.21 Billion
- Companies and other non-individual entities owe $1.21 billion in income tax. This category saw a sharp increase between March and September 2023, jumping from $540 million to $1.13 billion, driven by the 2023 provisional and terminal tax cycle. It has remained above $1 billion since.
5) Tax Credits & Entitlements Debt: $322.9 Million
- This is a newer reporting category introduced from the 2025 financial year, consolidating Working for Families tax credits, FamilyBoost, and COVID-era support payments (resurgence support, COVID support payment, cost of living payment). Previously, Working for Families was reported separately and sat at $273.5 million in June 2024.
6) Other Tax: $171.4 Million
- Other tax includes fringe benefit tax (FBT), non-resident withholding tax, resident withholding tax, dividend withholding tax, gaming machine duty and several smaller categories. This has been relatively stable, fluctuating between $147 million and $176 million throughout the five-year period.
Are you a business owner with tax debt? Our definitive guide explains how tax debt builds up, what IRD can and can't do, your options for repayment and penalty relief, and when to get professional help.
Tax Debt by Customer Type: Companies vs Individuals
Companies account for the majority of New Zealand's tax debt, owing $5.71 billion, or 61% of the total. Individuals owe $3.11 billion (33%), while other entities (trusts, partnerships, embassies and similar) owe $471 million (5%).
| Customer Type | Jun 2025 ($M) | Share | Sep 2020 ($M) | Growth |
|---|---|---|---|---|
| Companies | $5,707.4 | 61.4% | $2,457.3 | +132.2% |
| Individuals | $3,111.1 | 33.5% | $1,437.7 | +116.4% |
| Other Entities | $471.3 | 5.1% | $269.2 | +75.0% |
| Total | $9,289.8 | 100% | $4,164.2 | +123.1% |
Source: Inland Revenue administrative data - growth calculated from September 2020 to June 2025.
1) Company Tax Debt: $5.71 Billion
2) Individual Tax Debt: $3.11 Billion
1) Company Tax Debt: $5.71 Billion
- Company tax debt has grown from $2.46 billion in September 2020 to $5.71 billion in June 2025. The sharp acceleration began in the June 2023 quarter, when company debt jumped from $2.87 billion to $3.36 billion in a single quarter and has climbed steadily since. This coincides with the period of high interest rates, falling demand, and tightening cashflow that hit New Zealand businesses from mid-2022 onwards.
- Our View: The doubling of company tax debt in five years is a direct indicator of financial stress across the business sector. When companies fall behind on tax, it usually means cashflow has been prioritised towards wages, rent and suppliers ahead of IRD. That is understandable in the short term, but IRD is not a lender and does not offer the flexibility of a bank. Companies that treat tax obligations as a de facto line of credit are accumulating risk that can quickly become unmanageable.
2) Individual Tax Debt: $3.11 Billion
- Individual tax debt has more than doubled from $1.44 billion to $3.11 billion over the same period.
- A significant portion of this relates to self-employed individuals and sole traders who face the same cashflow pressures as businesses, without the structural support (or the complexity) of a company structure. Individuals also carry income tax debt from auto-assessment shortfalls, provisional tax underpayments, and Working for Families overpayments.
Quarterly Trend: Company vs Individual Tax Debt
| Quarter | Companies ($M) | Individuals ($M) | Other ($M) | Total ($M) |
|---|---|---|---|---|
| Sep 2020 | $2,457.3 | $1,437.7 | $269.2 | $4,164.2 |
| Jun 2021 | $2,543.8 | $1,582.6 | $257.2 | $4,383.7 |
| Jun 2022 | $2,740.4 | $1,801.3 | $299.7 | $4,841.3 |
| Jun 2023 | $3,358.9 | $2,091.8 | $347.7 | $5,798.5 |
| Jun 2024 | $4,772.4 | $2,774.9 | $396.7 | $7,943.9 |
| Jun 2025 | $5,707.4 | $3,111.1 | $471.3 | $9,289.8 |
Source: Inland Revenue administrative data
Yellow highlight = inflection point (June 2023) where the rate of growth accelerated sharply.
Know This: Between June 2022 and June 2025, total tax debt nearly doubled from $4.84 billion to $9.29 billion. This three-year period covers the sharp rise in interest rates, the economic slowdown, and increased business failures. It is the clearest indicator in the data that New Zealand businesses and individuals have been under sustained financial pressure.
Yellow highlight = inflection point (June 2023) where the rate of growth accelerated sharply.
Know This: Between June 2022 and June 2025, total tax debt nearly doubled from $4.84 billion to $9.29 billion. This three-year period covers the sharp rise in interest rates, the economic slowdown, and increased business failures. It is the clearest indicator in the data that New Zealand businesses and individuals have been under sustained financial pressure.
Tax Debt by Age: How Long Has It Been Owed?
IRD splits tax debt into two categories: debt under two years old and debt over two years old. The balance between these tells us whether tax debt is being actively resolved or accumulating.
| Age of Debt | Jun 2025 ($M) | Share | Sep 2020 ($M) | Growth |
|---|---|---|---|---|
| Under 2 years | $4,660.2 | 50.2% | $2,213.7 | +110.5% |
| Over 2 years | $4,629.6 | 49.8% | $1,950.5 | +137.4% |
| Total | $9,289.8 | 100% | $4,164.2 | +123.1% |
Source: Inland Revenue administrative data
The data shows that old debt is growing faster than new debt. Debt over two years old has increased 137%, compared to 111% for debt under two years. This means tax debts are not being resolved - they are ageing, compounding with penalties and interest, and becoming harder to clear.
The data shows that old debt is growing faster than new debt. Debt over two years old has increased 137%, compared to 111% for debt under two years. This means tax debts are not being resolved - they are ageing, compounding with penalties and interest, and becoming harder to clear.
Quarterly Trend: Old vs New Tax Debt
| Quarter | Under 2 Years ($M) | Over 2 Years ($M) | Over 2 Yrs Share | Total ($M) |
|---|---|---|---|---|
| Sep 2020 | $2,213.7 | $1,950.5 | 46.8% | $4,164.2 |
| Jun 2021 | $2,339.8 | $2,043.8 | 46.6% | $4,383.7 |
| Jun 2022 | $2,346.1 | $2,495.2 | 51.5% | $4,841.3 |
| Jun 2023 | $3,097.9 | $2,700.5 | 46.6% | $5,798.5 |
| Jun 2024 | $4,428.4 | $3,515.5 | 44.3% | $7,943.9 |
| Jun 2025 | $4,660.2 | $4,629.6 | 49.8% | $9,289.8 |
Source: Inland Revenue administrative data
Our View: The fact that nearly half of all tax debt is over two years old, and that old debt is growing faster than new debt, suggests the system is accumulating unresolved liabilities. IRD's penalties and Use-of-Money Interest compound daily. A $50,000 GST debt that sits unresolved for two years can grow to $60,000 or more through penalties and interest alone. For taxpayers carrying old debt, the compounding effect makes the position harder to resolve with every passing quarter. If you are in this situation, engaging with IRD or seeking professional advice is the single most effective step you can take.
Our View: The fact that nearly half of all tax debt is over two years old, and that old debt is growing faster than new debt, suggests the system is accumulating unresolved liabilities. IRD's penalties and Use-of-Money Interest compound daily. A $50,000 GST debt that sits unresolved for two years can grow to $60,000 or more through penalties and interest alone. For taxpayers carrying old debt, the compounding effect makes the position harder to resolve with every passing quarter. If you are in this situation, engaging with IRD or seeking professional advice is the single most effective step you can take.
Historical Tax Debt (2020 to 2025): The Full Picture
The table below shows how total tax debt has grown quarter by quarter since September 2020, broken down by product. The data reveals three distinct phases - relative stability (2020-2022), acceleration (2022-2023), and sustained high growth (2023-2025).
Total Tax Debt by Product: Quarterly (Selected)
| Quarter | GST ($M) | PAYE etc ($M) | Income Tax Individual ($M) | Income Tax Non-Individual ($M) | Other* ($M) | Total ($M) |
|---|---|---|---|---|---|---|
| Sep 2020 | $1,437.9 | $801.1 | $1,016.1 | $591.3 | $317.7 | $4,164.1 |
| Jun 2021 | $1,523.0 | $919.5 | $1,069.5 | $515.5 | $356.1 | $4,383.6 |
| Jun 2022 | $1,824.5 | $822.3 | $1,207.7 | $583.4 | $403.4 | $4,841.3 |
| Jun 2023 | $2,239.8 | $1,015.9 | $1,458.8 | $684.5 | $399.5 | $5,798.5 |
| Jun 2024 | $2,836.2 | $1,514.5 | $2,044.2 | $1,099.9 | $449.2 | $7,943.9 |
| Jun 2025 | $3,259.8 | $2,027.6 | $2,299.1 | $1,209.1 | $494.2 | $9,289.8 |
Source: Inland Revenue administrative data
*Other includes WfF/tax credits & entitlements and other tax categories
Yellow = inflection point (June 2023).
*Other includes WfF/tax credits & entitlements and other tax categories
Yellow = inflection point (June 2023).
Customers with Tax Debt
| Quarter | Customers | Total Debt ($M) | Avg Debt Per Customer |
|---|---|---|---|
| Sep 2020 | 371,000 | $4,164 | $11,224 |
| Jun 2021 | 418,600 | $4,384 | $10,473 |
| Jun 2022 | 480,300 | $4,841 | $10,079 |
| Jun 2023 | 524,000 | $5,799 | $11,066 |
| Jun 2024 | 512,000 | $7,944 | $15,516 |
| Jun 2025 | 527,400 | $9,290 | $17,613 |
Source: Inland Revenue administrative data. Average debt per customer = total debt / customers with debt.
Know This: The average debt per customer has grown from $11,224 in September 2020 to $17,613 in June 2025, a 57% increase. But the number of customers has grown more slowly (42%). This means existing debtors are accumulating larger balances, not just more people falling behind. The compounding effect of IRD penalties and interest is a major driver of this.
Know This: The average debt per customer has grown from $11,224 in September 2020 to $17,613 in June 2025, a 57% increase. But the number of customers has grown more slowly (42%). This means existing debtors are accumulating larger balances, not just more people falling behind. The compounding effect of IRD penalties and interest is a major driver of this.
Growth Rates by Tax Type (September 2020 to June 2025)
| Tax Type | Sep 2020 ($M) | Jun 2025 ($M) | Growth ($M) | Growth (%) |
|---|---|---|---|---|
| Employer Activities (PAYE etc) | $801.1 | $2,027.6 | +$1,226.5 | +153.1% |
| GST | $1,437.9 | $3,259.8 | +$1,821.9 | +126.7% |
| Income Tax - Individuals | $1,016.1 | $2,299.1 | +$1,283.0 | +126.3% |
| Income Tax - Non-Individuals | $591.3 | $1,209.1 | +$617.8 | +104.5% |
| Other Tax | $159.7 | $171.4 | +$11.7 | +7.3% |
| Total | $4,164.1 | $9,289.8 | +$5,125.7 | +123.1% |
Source: Inland Revenue administrative data - WfF/tax credits excluded from growth comparison due to reclassification.
Our View: Every major tax type has at least doubled since September 2020. Employer activities (PAYE) has grown the fastest at 153%, which is a concerning indicator because it represents money deducted from employee wages and not passed on. This is not a problem that will resolve itself. Businesses facing tax debt should engage with IRD early and explore instalment arrangements, penalty remission applications, or professional advice where appropriate. Waiting only increases the balance and reduces the available options.
Our View: Every major tax type has at least doubled since September 2020. Employer activities (PAYE) has grown the fastest at 153%, which is a concerning indicator because it represents money deducted from employee wages and not passed on. This is not a problem that will resolve itself. Businesses facing tax debt should engage with IRD early and explore instalment arrangements, penalty remission applications, or professional advice where appropriate. Waiting only increases the balance and reduces the available options.
Frequently Asked Questions
How much tax debt does New Zealand have?
As at 30 June 2025, total tax and entitlement debt stands at $9.29 billion. This has more than doubled from $4.16 billion in September 2020. The figure excludes child support, student loans and small business cashflow loans.
What type of tax debt is most common?
GST debt is the largest single category at $3.26 billion (35% of all tax debt), followed by employer activities including PAYE at $2.03 billion (22%) and individual income tax at $2.30 billion (25%). GST and PAYE are treated most seriously by IRD because they are trust monies collected on behalf of the government.
How many New Zealanders owe tax?
527,400 taxpayers had some form of tax debt as at June 2025. This number fluctuates with filing dates, typically peaking around key filing deadlines. The average debt per customer is approximately $17,600, though this varies significantly, with some owing a few hundred dollars and others owing six or seven figures.
Is tax debt increasing?
Yes, significantly. Total tax debt grew 16.9% year-on-year (June 2024 to June 2025) and has increased 123% over five years. Employer activities debt (PAYE etc) has grown the fastest at 153% since September 2020. The growth rate has outpaced both inflation and population growth by a wide margin.
What happens if I don't pay my tax debt?
IRD has significant powers to recover unpaid tax. These include deducting money directly from your bank account, redirecting income from your customers, registering caveats over your property, and applying to liquidate your company or make you bankrupt. IRD can also pursue directors personally for unpaid PAYE and GST. Our tax debt for business owners guide explains these powers in detail.
Can tax debt be written off?
Penalties and interest can sometimes be remitted if you can demonstrate reasonable cause (such as serious illness or unforeseeable events). Core tax, the actual amount owed, is rarely written off unless you meet the high threshold for serious financial hardship. Filing accurately and engaging early gives you the best chance of a favourable outcome.
Does this data include student loans?
No. The IRD dataset used in this guide excludes student loans, child support and small business cashflow loans. Student loan debt is reported separately by IRD and the Ministry of Education - we also have a dedicated student loan debt statistics guide.
Where does this data come from?
All data is sourced from Inland Revenue's tax and entitlements debt dataset, published 31 October 2025. The data is reported quarterly and covers the period from September 2020 to June 2025. IRD notes that a significant system upgrade in 2020 changed how debt was reported, which is why historical data prior to September 2020 is not included.
