Tax & Income guide · New Zealand
New Zealand Income Tax Brackets — 2026 Guide
See New Zealand’s 2026/27 individual income-tax brackets and work through the difference between a marginal rate and the effective rate paid across a full income.
Reviewed 26 August 2026
Reviewed by KiwiTools editorial team — NZ calculator researchers; tax settings checked against Inland Revenue
General information only, not tax, financial, employment or legal advice. Check your tax code, agreement and current Inland Revenue guidance for your circumstances.
Key points
Read the brackets without the usual panic
Only the income inside a band is taxed at that band’s rate.
A marginal rate describes the next taxable dollar; an effective rate describes tax across the whole taxable income.
PAYE on a payslip also contains ACC, so it will not match an income-tax-only calculation line for line.
Individual income-tax brackets for 1 April 2026 to 31 March 2027
These are annual taxable-income bands. The last column shows the tax generated inside a complete band, not the tax on an entire salary.
| Check | Taxable slice | Rate | Tax on a full slice |
|---|---|---|---|
| First band | $0–$15,600 | 10.5% | $1,638.00 |
| Second band | $15,601–$53,500 | 17.5% | $6,632.50 |
| Third band | $53,501–$78,100 | 30% | $7,380.00 |
| Fourth band | $78,101–$180,000 | 33% | $33,627.00 |
| Top band | Over $180,000 | 39% | Depends on income |
A higher bracket does not reach backwards
Take taxable income of $80,000. The first $15,600 is taxed at 10.5%, the next $37,900 at 17.5%, the next $24,600 at 30%, and only the final $1,900 at 33%. The 33% rate does not suddenly apply to the first $78,100.
That makes refusing a pay rise “because of the tax bracket” a poor call in ordinary income-tax terms. The extra dollar still leaves something after tax. Income-tested support or other deductions may change the wider household result, but the bracket itself does not make gross income disappear.
Read the related how paye works guideRead the related salary after tax guideRead the related secondary tax guide
Marginal and effective rates answer different questions
The marginal rate is useful when asking what happens to the next $1,000 of taxable income. The effective rate is total income tax divided by total taxable income. Because early dollars pass through lower bands, the effective percentage normally sits below the highest rate reached.
Keep ACC outside that effective income-tax figure unless it is clearly labelled. Likewise, KiwiSaver and student-loan repayments are not income tax just because payroll deducts them.
Taxable income is not always the salary printed in an offer
A salary earner with one straightforward job may see the two figures line up closely. Someone with taxable allowances, interest, rental income or deductible expenses can have a different total taxable income from their base salary.
The bracket table therefore explains the annual assessment, not every payslip. Employers withhold through PAYE during the year; Inland Revenue later works from the income actually reported.
Use a bracket table for understanding, not payroll reconstruction
A bracket calculation is the right tool for checking marginal and effective income tax. For one fortnightly payslip, use a pay-period calculation that includes the declared code, ACC and rounding.
If the practical question is “What lands in my bank?”, move to the salary-after-tax guide. That result can include KiwiSaver and a student loan without pretending those deductions are extra tax brackets.
Frequently asked questions
What are the NZ income-tax brackets for 2026/27?
The individual rates are 10.5% to $15,600, 17.5% to $53,500, 30% to $78,100, 33% to $180,000 and 39% above $180,000.
Does all my income get taxed at 33% if I enter that bracket?
No. Only the slice above $78,100 and up to $180,000 is taxed at 33%.
What is my marginal tax rate?
It is the statutory rate applying to your next taxable dollar, before considering ACC, credits or other deductions.
What is an effective tax rate?
It is total income tax divided by total taxable income. It normally sits below the highest marginal rate reached.
Is the ACC levy another tax bracket?
No. It is a separate levy collected with PAYE on liable earnings up to its annual cap.
Put the guide into practice
Continue with related KiwiTools calculators
Test your own numbers, compare scenarios and return to the guide to check assumptions and limitations.