Income tax (rates / brackets)

New Zealand's income tax system uses progressive tax brackets that determine the amount of tax withheld from employee wages. As of 1 April 2024, the standard tax brackets are 10.5% on income up to NZ$14,000, 17.5% on income between NZ$14,001 and NZ$48,000, 30% on income between NZ$48,001 and NZ$70,000, and 33% on income above NZ$70,000. These rates apply to residents and non-residents earning New Zealand-sourced income.

The income tax framework is governed by the Income Tax Act 2007 and administered by Inland Revenue (Te Tari Tāke). The tax brackets are indexed annually on 1 April to account for inflation, ensuring the thresholds adjust with the cost of living. The most recent adjustment on 1 April 2024 increased all bracket thresholds by 5.1% from their previous levels.

Employers must calculate and withhold income tax from employee salaries and wages using the correct tax code provided by each employee. Tax codes reflect personal circumstances such as secondary employment, investment income, or tax credits. Payroll teams must apply the appropriate bracket rates based on gross earnings and remit withheld tax to Inland Revenue by the 20th of the following month.

Employees can request tax code changes if their circumstances change, and employers must process these updates promptly to ensure accurate withholding. Failure to withhold and remit tax correctly can result in penalties and interest charges. Annual tax reconciliation occurs through the personal tax return process, where employees may receive refunds or owe additional tax depending on their actual annual income and tax paid.