New Zealand Tax Rates 2026–27

How New Zealand tax brackets work

Each rate applies only to the slice of income inside its band, so moving into a higher bracket never reduces your pay. Inland Revenue calls these progressive rates. For 2026–27 there are five bands, and the top 39% rate starts above $180,000.

Here is the tax on a $90,000 salary, band by band:

IRD tax rate calculator: marginal and effective rates

Your marginal rate is the rate on your next dollar; your average rate is total tax divided by income. The calculator above shows both. At $90,000 the marginal income tax rate is 33% but the average is 21.75%.

The rate you actually lose on a pay rise can be higher than the bracket rate, because other deductions stack on top:

• ACC earners' levy: +1.75% on every dollar up to $156,641, nothing above it.
• IETC abatement: between $66,000 and $70,000 the credit shrinks by 13c a dollar, so an ME-code earner loses 44.75% of each extra dollar (30% tax + levy + abatement).
• Student loan: a further 12% over $24,128, taking a 33% band earner with a loan to 46.75%.
• Working for Families: family credits abate by 27.5% of family income over $44,900.

The 31 July 2024 threshold changes

Budget 2024 raised three thresholds from 31 July 2024: $14,000 became $15,600, $48,000 became $53,500 and $70,000 became $78,100. The rates and the $180,000 top threshold stayed the same. Treasury's Budget 2024 Tax at a Glance called it the first reduction in personal income tax since 2010, said the thresholds had been the same since 2010 apart from the 2021 top threshold, and estimated that 83% of New Zealanders would benefit from the package. The same package extended the IETC to incomes up to $70,000. Inland Revenue's tax policy team announced on 31 May 2024 that Parliament had passed the Taxation (Budget Measures) Bill.

Anyone earning over $78,100 saves the most: $1,043 a year compared with the old scale. 2025–26 was the first full tax year on the new thresholds.

Composite tax rates for 2024–25 explained

Because the change landed part-way through the year, Inland Revenue set a composite scale for the whole 2024–25 year (1 April 2024 – 31 March 2025). Where the old and new rates differed, the composite rate weights them by days: 121 days on the old rates (1 April to 30 July) and 244 on the new. For example, income of $14,001–$15,600 was taxed at 17.5% under the old scale and 10.5% under the new, which blends to 12.82%, the rate Inland Revenue prints. Your 2024–25 assessment used these rates no matter when in the year you earned the income.

NZ tax bracket history since 2010

New Zealand's scale has changed only twice since 2010. The 39% rate on income over $180,000 was added by the Taxation (Income Tax Rate and Other Amendments) Act 2020 for the 2021–22 and later income years, starting 1 April 2021. The 2024 change then raised the lower thresholds but left the top one alone.

Trust tax rate: 39% from 2024–25

Trustee income is taxed at 39% from the 2024–25 income year, up from 33%, to line it up with the top personal rate. Inland Revenue keeps 33% for trusts with $10,000 or less of trustee income after deductions, for deceased estates in the year of death and the next three years, for disabled beneficiary trusts and for energy consumer trusts.

The de minimis test is all-or-nothing: a trust with $12,000 of net trustee income pays 39% on all of it ($4,680), not just on the amount over $10,000. Income distributed to beneficiaries is taxed at their own rates instead, except under the minor and corporate beneficiary rules, which use 39%.

Secondary tax codes use the same bands

A second job is taxed at one flat rate chosen from the band your total annual income falls in. The ACC levy is added on top of each.