How income tax works in New Zealand
New Zealand tax residents generally pay income tax on worldwide income. Non-residents are generally taxed on New Zealand-source income, subject to the source rules and any double tax treaty.
For income from 1 April 2025, the individual rates are 10.5% up to NZD 15,600, 17.5% to NZD 53,500, 30% to NZD 78,100, 33% to NZD 180,000 and 39% above NZD 180,000. These bands apply in the 2026/27 tax year.
Employees usually pay through PAYE. The ACC earners' levy is normally deducted alongside PAYE and is 1.75% for 2026/27 on earnings up to NZD 156,641. Self-employed people generally pay provisional tax and ACC levies directly.
Interest, dividends, rental income, foreign income and taxable property gains may require an end-of-year assessment. Eligible new migrants and returning residents can receive a transitional-resident exemption on much overseas investment income for about four years.
Income tax brackets in New Zealand
| Bracket | Rate | Notes |
|---|---|---|
| NZD 0 to NZD 15,600 | 10.5% | |
| NZD 15,601 to NZD 53,500 | 17.5% | |
| NZD 53,501 to NZD 78,100 | 30% | |
| NZD 78,101 to NZD 180,000 | 33% | |
| Above NZD 180,000 | 39% |
Tax rates at a glance
- First band
- 10.5%NZD 0 - 15,600
- Second band
- 17.5%NZD 15,601 - 53,500
- Third band
- 30%NZD 53,501 - 78,100
- Fourth band
- 33%NZD 78,101 - 180,000
- Top rate
- 39%Above NZD 180,000
- ACC earners' levy
- 1.75%
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
EmployeesExpatsContractorsInvestorsHigh earners
Watch out for
- These are marginal rates, not a flat rate on all income. New Zealand has no general tax-free threshold, so the first band starts at 10.5%.
- PAYE can include the ACC earners' levy, but the levy has its own earnings cap and is not the same thing as income tax.
- The transitional-resident exemption is not a blanket exemption for every foreign receipt. Its eligibility, start date, end date and excluded income categories need checking.
- Foreign shares and funds can fall within the FIF rules, which may tax deemed income before cash is received.
Frequently asked questions
What is the top income-tax rate in New Zealand?
The top individual rate is 39% on income above NZD 180,000. Employees may also pay the ACC earners' levy on earnings up to the annual cap.
Do expats pay New Zealand income tax?
New Zealand tax residents generally pay on worldwide income, while non-residents are generally taxed on New Zealand-source income. Residence depends on facts such as a permanent place of abode and days present.
Is there a tax-free allowance in New Zealand?
No general tax-free personal allowance applies. Income is taxed from the first dollar at 10.5%, subject to credits and specific rules.