Tax Calculator NZ

New Zealand's income tax brackets, explained

New Zealand taxes income in steps, not as a single flat rate. Each bracket below only applies to the slice of your income that falls inside it, which is why the tax system is described as progressive.

These are the rates for the tax year running from 1 April 2026 to 31 March 2027, and they carry over unchanged from the year before.

Marginal rate versus what you actually pay

People often assume their tax bracket is the rate applied to their whole income. It isn't. The bracket your top dollar falls into is called your marginal rate, but your effective rate, the share of your total income that goes to tax, is always lower, because the earlier, cheaper brackets still apply first.

On the $90,000 example, the top dollar earned is taxed at 33%, but the effective rate across the whole salary is closer to 22%, because most of that income was still taxed at the lower 10.5%, 17.5% and 30% rates first. A pay rise that pushes part of your income into a higher bracket only affects the portion above the threshold, never the whole salary.

What counts as taxable income

For most employees, taxable income is simply gross salary or wages: what your employer pays you before any deductions. It also includes most bonuses, commission and overtime, which are typically taxed using an IRD-specified extra pay calculation rather than being added straight into your regular pay period, though the end-of-year effect is similar.

This calculator is built for ordinary salary and wage income under tax code M, your main or only job. It doesn't cover investment income, self-employed or contractor income (which is usually taxed differently, without PAYE deductions at all), or secondary tax codes for a second job.

Tax, plus the other deductions on your payslip

Income tax is usually the biggest deduction, but it's rarely the only one. The ACC earner's levy adds 1.75% on top, capped at $156,641 of income for the 2026/27 year. If you're in KiwiSaver, your chosen contribution rate, from 3.5% up to 10%, comes off your gross pay as well. To see all of these deductions combined into a single take-home figure, rather than income tax on its own, try the take-home pay calculator. If you're paid by the hour and want to convert that into an annual figure before working out the tax on it, the wage calculator handles the conversion first.

How tax is deducted per pay period, not per year

Even though the tax brackets are defined as annual thresholds, your employer doesn't wait until the end of the year to work out what you owe. Instead, payroll software converts your pay for that period, weekly, fortnightly or monthly, into an annualised figure, works out the tax on that annual figure using the brackets above, and then divides the result back down to match your actual pay period. This calculator does exactly the same thing, which is why choosing "Weekly" instead of "Annual" for the same underlying salary produces a consistent, correctly scaled result rather than a rough approximation.

This is also why a single week with unusually high pay, a big commission cheque, for example, can look like it was taxed at a much higher rate than normal: payroll software temporarily treats that week as if you earned that amount every week of the year, before correcting itself the following pay period once your income returns to normal.

Why your payslip might not match this exactly

This tool estimates tax code M, ordinary salary or wages, using the standard annual brackets. Real payslips can differ slightly for a few reasons: bonuses and irregular payments are often taxed using IRD's extra pay tables rather than the regular bracket method, some employers round differently within a pay period, and anyone on a secondary tax code (a second job, for example) will see a different rate entirely, since secondary income is taxed at a flat rate tied to your estimated total annual earnings rather than the stepped brackets shown above. If your numbers look meaningfully different from what your employer deducts, your payslip and your IRD account are always the accurate source, not this or any other estimate tool. See the main salary calculator for the full PAYE, ACC and KiwiSaver breakdown together.