Free Income Tax Calculator for New Zealanders
The annual income tax you owe based on the current NZ IRD brackets. Excludes the ACC earner levy and KiwiSaver, both of which are paid alongside PAYE during the year.
Your income
Annual income tax on a gross income of $80,000 at the current NZ brackets.
About our Income Tax Calculator
Each NZ tax bracketBracket (tax)Income band taxed at a single rate; NZ has five brackets from 10.5% to 39% in 2026/27.View in glossary → only applies to the slice of income inside it. The first $15,600 of every income, whether you earn $20,000 or $200,000, pays exactly $1,638 in tax. The 17.5% bracket adds another $6,633 once your income passes $53,500. After that, each higher bracket only kicks in on the part of income above its threshold, which is why the calculator shows a per-bracket breakdown rather than a single rate.
The result is taxable incomeTaxable incomeGross income minus allowable deductions; the figure tax is calculated on.View in glossary → turned into an annual tax bill, separated into the five slices. Every NZ income tax outcome flows from this same maths, whether you are an employee on PAYE, a sole trader filing an IR3, or a contractor on schedular payments.
Drag the income slider to see how the slice across each bracket changes. The calculator surfaces both the marginal rateMarginal rateTax rate applied to your next dollar of income; the rate on the top slice of your earnings.View in glossary → (the rate on your next dollar) and the effective rateEffective tax rateTotal tax as a percentage of total income; lower than the marginal rate due to step brackets.View in glossary → (your tax divided by your gross), which usually sit a few percentage points apart for anyone earning over $53,500.
How to use it
Enter your annual gross income into the field, or use the slider for a quick pass.
For an employee, that figure is your gross salary plus any taxable extras (bonus, back pay, redundancy lump sum). For a sole trader, it is your net business income after deducting expenses but before tax. For a contractor on schedular payments, it is the total you invoiced minus deductible business costs.
The result panel shows the annual tax owed, the effective rate as a percentage of gross, and the per-bracket slices so you can see exactly how much of your tax sits in each band.
Why use it
Annual tax is the only number that matters at year-end. Whether you are reconciling a PAYE-deducted year, drafting an IR3, or estimating provisional tax, the figure starts at this annual calculation. The brackets are the same regardless of how you earn the income.
The per-bracket breakdown also makes one common misconception easier to spot. Crossing into the 33% bracket does not mean every dollar gets taxed at 33%, only the dollars above $78,100. Most people are surprised by how much of their income still pays the lower-bracket rates.
The maths behind it
Tax = Σ (slicei × ratei) Each tax bracket only taxes the income that falls inside it. A $200,000 earner and a $20,000 earner both pay 10.5% on their first $15,600. The 17.5% rate only applies to the slice from $15,601 to $53,500. The 30% rate only applies to the slice from $53,501 to $78,100. The 33% rate only applies to the slice from $78,101 to $180,000. Anything above $180,000 is taxed at 39%. Adding the slices together gives the annual tax bill.
Worked example
Reuben, sole-trader builder in Auckland, with $130,000 of net business income.
Reuben works for himself as a sole trader. After deducting business expenses (vehicle, tools, public liability insurance, sub-contracted labour), his net taxable income for the year is $130,000.
IRD applies the brackets in order: $1,638 at 10.5%, $6,633 at 17.5%, $7,380 at 30%, then $17,127 at 33% on the slice from $78,101 to $130,000. None of his income reaches the 39% bracket.
His total income tax for the year is $32,778, an effective rate of 25.2%. His marginal rate (the rate on the next dollar) is 33%, because that is where the top of his income sits.
As a sole trader Reuben pays this in three provisional-tax instalments through the year, then squares it up in his IR3 return after 31 March.
Things to keep in mind
- Income tax is annual. This calculator returns the tax owed on a full year of taxable income. PAYEPAYEPay As You Earn; income tax taken out of each paycheque by the employer.View in glossary → is the in-year deduction your employer takes from each pay run; the two reconcile at year-end. If they do not match, IRD pays a refund or asks for the shortfall as residual income taxResidual income tax (RIT)Final tax owed for the year after credits; sets next year's provisional-tax base.View in glossary →.
- Excludes ACC and KiwiSaver. The ACC earner levyACC earner levy1.75% of pay (2026/27), capped at $156,641 of liable earnings; funds non-work injury cover and is taken via PAYE.View in glossary → and KiwiSaverKiwiSaverNZ workplace retirement savings scheme. From 1 April 2026, minimum employee and employer contributions are both 3.5% of gross pay (rising to 4% in 2028); the government adds 25c per $1, capped at $260.72/yr.View in glossary → contributions are paid alongside PAYE during the year, but they are separate from income tax. The take-home pay calculator combines all four.
- Sole traders, self-employed, and contractors. If your income is not paid through PAYE, the same brackets still apply to your annual figure. You file an IR3 return after the financial year and pay tax through provisional-tax instalments using AIM, the standard, or estimation methods. Use the provisional tax calculatorProvisional taxTax paid in instalments through the year by self-employed and company taxpayers.View in glossary → to see the schedule.
- IETC and Working for Families. Some low-to-middle earners receive the Independent Earner Tax CreditIETCIndependent Earner Tax Credit; small annual credit for low-to-mid earners with no Working for Families.View in glossary →, and families with children may qualify for Working for FamiliesWorking for FamiliesGovernment package of weekly tax credits (FTC, IWTC, MFTC, BSTC) for working families.View in glossary → payments. Both reduce effective tax. Neither is in this view.
- Other tax types are separate. GST, FBT, RWT, NRWT, and FIF tax are all separate regimes from personal income tax. Each has its own calculator on the site.
NZ-specific notes
FAQs
Is the marginal rate the rate I "actually" pay?
No. Your marginal rate is the rate that would apply to one more dollar of income. Your effective rate is the average rate across all your income. They are the same only if all your income sits in a single bracket. Most NZ earners sit across two or three brackets, so the effective rate is meaningfully lower than the marginal rate.
Why does my employer take a different amount than this calculator shows?
PAYE estimates the same figure pay run by pay run, then divides by your pay frequency. Rounding in the IR340/IR341 deduction tables can shift the per-pay number by a few cents either way. Across a full year the totals match within a dollar or two.
How does this differ from the PAYE calculator?
The PAYE calculator shows what comes off each pay run, scaled from a per-period figure. This calculator works directly in annual figures, which is the form sole traders, contractors, and people filing IR3 returns deal with. The maths is the same; the framing is different.
Does the calculator handle joint returns?
NZ does not offer joint filing for income tax. Each person files individually, even if their household pools income. Run each partner’s income separately to see each person’s tax bill.
What about Working for Families and the IETC?
Working for Families adds tax credits for families with children, abated against household income above set thresholds. The IETC adds a small annual credit for low-to-middle earners not receiving WFF. Neither shows up in this calculator. The Working for Families calculator handles WFF specifically.
How do losses or carried-forward deductions affect the figure?
Net business losses can offset other income in the same year, and unused losses carry forward to future years (subject to shareholder-continuity tests for companies). Enter your net taxable income (after loss offsets) for the figure to be accurate.
References & sources
- Inland Revenue, "Tax rates for individuals". ird.govt.nz
- Inland Revenue, "Income from self-employment (IR3 filing)". ird.govt.nz
- New Zealand Treasury, "Budget Economic and Fiscal Update 2024" (bracket changes). treasury.govt.nz
- Inland Revenue, "Provisional tax". ird.govt.nz