Why your tax isn't a flat percentage
New Zealand income tax is progressive. Income is taxed in slices: 10.5% on the first $15,600, then 17.5%, 30%, 33% and 39% on the highest earnings. There's no tax-free threshold, so every dollar is taxed — but only the portion within each bracket is taxed at that bracket's rate.
The ACC earners' levy (1.75%, capped) is collected alongside PAYE, so your real deduction is a little higher than income tax alone.
Common questions
For 2026/27: 10.5% up to $15,600, 17.5% to $53,500, 30% to $78,100, 33% to $180,000, and 39% above. Only the income within each bracket is taxed at that rate.
No. Tax applies from the first dollar of income — there is no personal allowance.
The ACC earners' levy funds accident cover. It's 1.75% of earnings up to $156,641 and is collected with your PAYE.