In New Zealand for the 2025-2026 tax year, income tax is progressive with five tax brackets based on income levels. The rates are as follows:
- 10.5% on income up to $15,600
- 17.5% on income from $15,601 to $53,500
- 30% on income from $53,501 to $78,100
- 33% on income from $78,101 to $180,000
- 39% on income over $180,000
These tax rates apply only to the income within each bracket, not the total income. This means as your income rises, only the portion falling in each bracket is taxed at that bracket's rate, which helps in gradual taxation and avoiding sudden jumps in tax burden. The tax brackets were adjusted upwards in 2025 to ease the tax paid by most employees, mitigating inflation effects (bracket creep).
Additionally, New Zealand's PAYE (Pay As You Earn) system deducts tax before you receive your income like salaries or wages. Other income like self- employment or rental income is taxed at the end of the year based on total taxable income.
In summary, tax in New Zealand is a progressive system with rates ranging from 10.5% to 39% depending on income, with current brackets set for the 2025-2026 tax year as detailed above.
