New Zealand taxes the very first dollar
Most developed countries give you a slice of income tax-free before anything is charged — £12,570 in the UK, €12,348 in Germany, $18,200 in Australia. New Zealand gives you nothing. PAYE starts at 10.5% from the first dollar you earn, and the rate rises from there: 17.5% above $15,600, 30% above $53,500, 33% above $78,100 and 39% above $180,000.
| Annual income | PAYE | Effective rate |
|---|---|---|
| $10,000 | $1,050 | 10.50% |
| $15,600 | $1,638 | 10.50% |
| $20,000 | $2,408 | 12.04% |
| $30,000 | $4,158 | 13.86% |
Someone earning $10,000 — a student on a part-time job, say — still pays $1,050 in income tax. In Australia the same person pays nothing at all. It is the single biggest structural difference between the two systems, and it is invisible if you only compare top rates.
On a $70,000 salary with KiwiSaver at 3%, the arithmetic runs $13,221 PAYE, $1,169 ACC levy and $2,100 KiwiSaver, leaving about $53,510. Every line is reproducible in the PAYE calculator.
Three deductions that are not income tax
- ACC earners' levy — 1.67% of your income, capped, funding New Zealand's no-fault accident compensation scheme. It covers everyone for injury regardless of who was at fault, which is why New Zealanders cannot generally sue for personal injury. There is no equivalent line on a payslip almost anywhere else.
- KiwiSaver — 3% by default, but unlike Australian superannuation it is opt-out, not compulsory. You can contribute 3%, 4%, 6%, 8% or 10%, or take a savings suspension and contribute nothing. Your choice moves take-home pay directly.
- Student loan repayments — 12% of every dollar above the repayment threshold, deducted at source.
The student loan threshold is a 12-point step
Below the repayment threshold of $24,128 a year you repay nothing. Above it, 12% of the excess comes out — and because it sits on top of PAYE and ACC, the jump in marginal burden is abrupt:
| Income | Marginal burden — no loan | With student loan |
|---|---|---|
| $20,000 | 22.17% | 22.17% |
| $30,000 | 22.17% | 34.17% |
| $60,000 | 34.67% | 46.67% |
| $80,000 | 37.67% | 49.67% |
| $200,000 | 42.00% | 54.00% |
A graduate on $60,000 keeps just over half of their next dollar. In cash terms, at $30,000 the loan takes about $705 a year; at $24,500, barely over the threshold, it takes $45. The threshold itself is not a cliff — only the excess is charged — but the 12 percentage points are added on top of everything else, and they persist until the loan is cleared.
What the calculator covers — and what it doesn't
- The main "M" tax code. Secondary tax codes for a second job withhold at a flat higher rate.
- No tax credits — Working for Families, the Independent Earner Tax Credit and the FamilyBoost payment can be worth thousands and are not applied.
- Employer KiwiSaver contributions are not shown. Your employer adds at least 3% on top of your salary, subject to ESCT.
- Per-pay-period rounding is ignored. IRD calculates PAYE each pay period, so weekly and fortnightly figures differ slightly from an annual division.
- New Zealand has no general capital gains tax, but the bright-line test can tax property sold within a set period — that is outside this calculator.
Rates come from Inland Revenue, published as applying from 1 April 2025 and unchanged since. If a figure looks wrong, please tell us — our methodology explains how each calculator is checked before publication.