Free Marginal Rate Calculator for New Zealanders
NZ has five income tax brackets for 2026/27. Your marginal rate is the rate paid on the next dollar earned; your effective rate is total tax as a share of income.
Your income
Based on a gross income of $80,000.
About our Marginal Rate Visualiser
Pay rises feel different across brackets. At 10.5% you keep 89.5 cents of every gross dollar. At 39% you keep 61. The middle of the curve is where most NZ earners sit, and where every additional dollar gets taxed somewhere between 17.5% and 33% depending on which bracketBracket (tax)Income band taxed at a single rate; NZ has five brackets from 10.5% to 39% in 2026/27.View in glossary → you have crossed into.
The marginal rateMarginal rateTax rate applied to your next dollar of income; the rate on the top slice of your earnings.View in glossary → is the rate that applies to the next dollar of income, set by the bracket your top dollar sits in. The effective rateEffective tax rateTotal tax as a percentage of total income; lower than the marginal rate due to step brackets.View in glossary → is the average rate across all your income. They line up only when your whole income sits inside one bracket; for anyone earning above $53,500, the effective rate runs meaningfully below the marginal rate because the lower brackets carry their share.
The calculator shows both numbers, plus a per-bracket breakdown of how your tax bill splits across the five rates. Move the income slider to see how a $5,000 or $10,000 jump shifts the marginal rate, and how much of your income is still being taxed at the lower rates.
How to use it
Enter your annual gross income (or use the slider). The result panel returns the marginal rate, the effective rate, the tax owed on the next $1,000 of income, and the per-bracket split of total tax.
For decisions about a pay rise, side gig, or overtime, the "tax on next $1,000" line is the figure to focus on. Multiply it through to estimate the tax on a larger amount; for jumps that cross a bracket boundary, the slider gives a more precise figure than a flat multiplication.
Why use it
The single most useful question this calculator answers is whether a piece of additional income is worth the time. A $5,000 side gig in the 30% bracket leaves $3,500 in your bank account. The same $5,000 in the 39% bracket leaves $3,050. The hours worked are the same.
The visualiser also makes the bracket boundaries visible. Most people overestimate how much of their income is taxed at the top rate they have crossed into. A $90,000 earner pays 33% on $11,900 of income but 17.5% on $37,900 of it, and 10.5% on the first $15,600. The headline 33% bracket only applies to one-eighth of their gross.
For decisions that interact with student loan repayments, ACC, or Working for Families abatement, the marginal-rate figure here is income tax only. The "all-in" rate on the next dollar can be 10-25 percentage points higher once those other deductions and abatement are layered on.
The maths behind it
Marginal rate = rate of the bracket containing your top dollar The marginal rate is whichever bracket your income peaks in. The effective rate is total tax divided by gross income. The two only match when your entire income sits inside one bracket. A pay rise that crosses a bracket boundary is taxed at two different marginal rates: the part below the boundary at the lower rate, the part above at the higher rate. The calculator shows the per-bracket split so you can see exactly where each marginal rate kicks in.
Worked example
Jordan, project manager in New Plymouth, on $76,000 considering $5,000 of weekend consulting.
Jordan’s salary of $76,000 sits in the 30% bracket (above $53,500, below $78,100). His effective tax rate on the salary alone is 19.8% ($15,020 of income tax on $76,000).
A $5,000 side income lifts his total to $81,000, which crosses the $78,100 boundary into the 33% bracket. The first $2,100 of new income still pays 30%; the remaining $2,900 pays 33%.
Tax on the new $5,000 lands at $1,587. Jordan keeps $3,413 of the side income (68.3%), even though headline marginal rates make the slice look like a 33% hit.
If he negotiated $10,000 of side income instead, the same maths would push more of it into the 33% bracket, lowering the keep-rate slightly. Past $180,000 of total income, every additional dollar would face 39%, and the keep-rate falls to 61 cents on the dollar.
Things to keep in mind
- Marginal vs effective. The figure on a payslip is the effective rate (total PAYE divided by gross). The marginal rate is the rate that applies to extra income, which is what matters for decisions about overtime, bonuses, or side work.
- <span class="term" tabindex="0" aria-describedby="term-tip-acc-earner-levy">ACC<span class="term__tip" role="tooltip" id="term-tip-acc-earner-levy"><strong>ACC earner levy</strong><span class="term__tip-def">1.75% of pay (2026/27), capped at $156,641 of liable earnings; funds non-work injury cover and is taken via PAYE.</span><a href="/glossary/#acc-earner-levy" class="term__tip-link">View in glossary →</a></span></span> adds another 1.75%. The marginal rate shown here is income tax only. The ACC earner levy adds 1.75% on every dollar up to $156,641 (2026/27). On a side income that pushes you up the brackets, ACC adds the same 1.75% across the slice.
- <span class="term" tabindex="0" aria-describedby="term-tip-working-for-families">Working for Families<span class="term__tip" role="tooltip" id="term-tip-working-for-families"><strong>Working for Families</strong><span class="term__tip-def">Government package of weekly tax credits (FTC, IWTC, MFTC, BSTC) for working families.</span><a href="/glossary/#working-for-families" class="term__tip-link">View in glossary →</a></span></span> abatement. Families receiving Working for Families lose tax credits as household income rises above the threshold, which acts like an extra "marginal rate" of 27% on top of the income-tax bracket. Effective marginal rates above $42,700 of family income can reach 50% or higher when WFF abatement is in play.
- Student loan adds 12%. Borrowers with the SL suffix on their tax code pay an extra 12% on every dollar above the $24,128 threshold. For someone in the 30% bracket with a student loan, the true marginal rate on the next dollar is 30% + 1.75% (ACC) + 12% (SL) = 43.75%.
- KiwiSaver is not a tax. KiwiSaver contributions reduce take-home pay but are savings, not tax. They do not feature in the marginal-rate calculation. Some people lump KiwiSaver into the perceived tax burden, which inflates the effective figure shown here.
NZ-specific notes
FAQs
Why is my effective rate so much lower than my marginal rate?
Because every income passes through the lower brackets first. A $200,000 earner pays only 10.5% on their first $15,600, 17.5% on the next $37,900, and so on. Their marginal rate is 33%, but their effective rate (total tax divided by total income) is closer to 26%.
Does crossing a bracket really mean I lose money?
No. NZ uses a step system, not a flat-rate flip. Crossing into a higher bracket only changes the rate on the dollars above the threshold. The first dollar past the line pays the new rate; everything below stays where it was. A pay rise always leaves you with more in your bank account, just less than the gross figure suggests.
How do ACC, KiwiSaver, and student loan factor in?
They sit on top of the income-tax marginal rate. ACC adds 1.75% on every dollar up to $156,641. KiwiSaver is your chosen contribution rate (3.5% to 10%) but is savings, not tax. Student loan adds 12% on every dollar above the $24,128 threshold for SL-coded borrowers. The "all-in" rate on the next dollar can be much higher than the bracket suggests.
What about Working for Families abatement?
Households receiving Working for Families lose 27 cents of tax credit for every dollar earned above the abatement threshold (currently around $42,700 of family income). Combined with the 30% income tax rate plus ACC, the effective marginal rate over that band can exceed 60% for a working family with two or more children.
Is the marginal rate the same for sole traders?
Yes, the same brackets apply to sole-trader and self-employed income. The difference is that sole traders pay through provisional tax instalments rather than PAYE, but the underlying rates are identical.
Does the 39% rate apply to bonuses?
Bonuses are taxed using a lump-sum method that approximates the marginal rate of the bracket your annualised income (including the bonus) falls into. A bonus that pushes annualised income above $180,000 is taxed at 39% on the slice above that threshold.
References & sources
- Inland Revenue, "Tax rates for individuals". ird.govt.nz
- Inland Revenue, "Working for Families". ird.govt.nz
- New Zealand Treasury, "Budget Economic and Fiscal Update 2024" (bracket change rationale). treasury.govt.nz
- Stats NZ, "Income and work". stats.govt.nz