NZ income tax rates and what they mean in practice
Five bands, one progressive rate, and the secondary codes that decide whether a second job costs more at year end.
On this page
- Rates from
- 1 April 2025
- Lowest rate
- 10.5% on first $15,600
- Top rate
- 39% on income above $180,000
- Progressive
- Each band applies only to income above it
- Secondary codes
- SB, S, SH, ST, SAInland Revenue, income tax rates
The five bands from 1 April 2025
New Zealand has five income tax rates that apply progressively: each rate applies only to the income above its threshold, not to the total. From 1 April 2025 the bands are 10.5% on income up to $15,600, 17.5% from $15,601 to $53,500, 30% from $53,501 to $78,100, 33% from $78,101 to $180,000, and 39% on income above $180,000. The thresholds moved on 31 July 2024. Inland Revenue, Taxation (Budget Measures) Act 2024 special report (opens in a new tab) Inland Revenue, income tax rates (opens in a new tab)
In a progressive system, each rate applies to the relevant portion of taxable income. Moving into a higher band does not apply that higher rate to the whole salary. The published income-tax table sets out the bands separately. Inland Revenue, income tax rates (opens in a new tab).
Why your payslip may not match the bracket rate
Employees give each employer or payer a tax code, and the payer uses Inland Revenue's PAYE tables to deduct tax each payday. The tables include the ACC earners' levy. Inland Revenue, IR341 (opens in a new tab) Each payer sees only its own payments, so the deduction is a running approximation of the annual liability rather than a simple multiplication of gross by a single rate. Inland Revenue, income tax rates (opens in a new tab)
Secondary tax codes for multiple income sources
A secondary tax code describes where a second income falls relative to the total across all sources. Inland Revenue's table runs from SB at 10.5% for total income up to $15,600, through S at 17.5%, SH at 30% and ST at 33%, up to SA at 39% for total income above $180,000 (rates before ACC levies). The code for a second job tells the second employer the rate that covers all income after the first job's tax. Inland Revenue, income tax rates (opens in a new tab)
If your main job already uses up the lower brackets, a second job's income that falls in the same bracket as the first is taxed at the same rate, and the total across both jobs is approximately correct. If the combined total pushes into a higher bracket, the secondary code for the second job should reflect that higher rate, and using the wrong code can result in a bill at year end rather than a refund.
Some income is not subject to secondary codes. Self-employment and rental income are not taxed before payment and are squared up at year end; interest has tax deducted before it is paid. These do not affect the secondary code calculation on their own. The interaction between salary and other income types at year end is where the secondary code system either works smoothly or creates an unexpected liability.
What the rates apply to
The five income-tax rates apply progressively to taxable income. Secondary tax codes describe another income source with tax deducted before payment, such as a second job, benefit, pension or student allowance. The annual income-tax calculation brings the taxable sources together. Inland Revenue, income tax rates (opens in a new tab). Inland Revenue, secondary tax codes (opens in a new tab).