New Zealand uses a progressive income tax system: your income is split into bands, and each band is taxed at its own rate. A higher rate only ever applies to the part of your income inside that band — never your whole salary. Here are the PAYE income tax rates for the 2026/27 tax year (1 April 2026 to 31 March 2027).
NZ income tax brackets 2026/27
| Income band | Tax rate |
|---|---|
| $0 – $15,600 | 10.5% |
| $15,601 – $53,500 | 17.5% |
| $53,501 – $78,100 | 30% |
| $78,101 – $180,000 | 33% |
| $180,001 and over | 39% |
How progressive tax works (worked example)
Say you earn $70,000 a year. You do not pay 30% on the whole amount. Instead:
- The first $15,600 is taxed at 10.5% = $1,638
- $15,600 to $53,500 ($37,900) at 17.5% = $6,632.50
- $53,500 to $70,000 ($16,500) at 30% = $4,950
Total PAYE income tax = $13,220.50 — an effective tax rate of about 18.9%, even though your top (marginal) rate is 30%.
Marginal vs effective rate
Your marginal rate is the rate on your next dollar earned (30% in the example above). Your effective rate is the total tax divided by total income (18.9%). The effective rate is always lower, because the lower bands are taxed at lower rates. This is why a pay rise is never "taxed away" — you always keep most of every extra dollar.
What else comes out of your pay
Income tax isn't the only deduction. On top of PAYE you'll usually also pay:
- ACC earner levy — 1.75% of your income (up to a cap of $156,641), which funds accident cover.
- KiwiSaver — optional, typically 3% of your gross pay if you're a member.
- Student loan — 12% of income above $24,128 a year, if you have one.
See gross vs net pay for how these stack up, or read what PAYE is for how deductions actually happen.
Work out your own numbers
Rather than do the maths by hand, use the free NZ Pay Calculator to see your exact take-home pay, or jump to a common salary like $70,000 after tax or $90,000 after tax.