The 2026–27 tax bands
| Income band (per year) | Tax rate |
|---|---|
| $0 – $15,600 | 10.5% |
| $15,601 – $53,500 | 17.5% |
| $53,501 – $78,100 | 30% |
| $78,101 – $180,000 | 33% |
| Over $180,000 | 39% |
On top of income tax, most employees also pay the ACC earner's levy of 1.75% on earnings up to $156,641 (a maximum of $2,741.22 a year).
Worked example: $120,000 income
Tax builds up band by band: $1,638 (first band) + $6,632.50 + $7,380 + $13,827 (the slice between $78,100 and $120,000 at 33%) = $29,477.50 of income tax. Add the ACC levy of $2,100 and take-home pay is $88,422.50 before KiwiSaver or student loan. Your effective rate is 24.6% — much lower than the 33% top band you sit in, because most of your income was taxed at lower rates on the way up.
Frequently asked questions
How is income tax calculated in NZ?
In bands. The first $15,600 is taxed at 10.5%, income between $15,601 and $53,500 at 17.5%, $53,501–$78,100 at 30%, $78,101–$180,000 at 33%, and everything above $180,000 at 39%. Nobody pays one flat rate on all their income.
What is my effective tax rate?
Your total tax divided by your total income. On $120,000, tax is $29,477.50 — an effective rate of 24.6%, even though your marginal (top) rate is 33%.
What is a marginal tax rate?
The rate on your next dollar earned. If you're in the 30% band, a $1,000 bonus loses $300 to tax (plus ACC and any student loan), not 30% of everything you earn.
Is the ACC levy a tax?
It's a levy collected through PAYE: 1.75% of earnings up to $156,641. It funds ACC's cover for accidents. It stops once your earnings pass the cap.
Do these rates apply to all income?
These bands cover salary and wages. Other income (rental, interest, self-employment) is taxed at the same personal rates but declared differently — and secondary income uses flat secondary tax codes instead.
Rates checked against official sources on 1 November 2026: IRD tax rates for individuals and IRD ACC earner's levy rates. See how we calculate for the full method and update log.