New Zealand income tax is primarily governed by the Income Tax Act 2007, with administration under the Tax Administration Act 1994. Income is generally taxed on a progressive basis for individuals, while most companies pay a flat 28% rate.
1. Personal income tax rates for 2026-27
For individuals, each rate applies only to the portion of taxable income in that bracket. Tax credits, ACC earners' levies and special deductions may affect the final amount payable. Refer to Inland Revenue's individual tax rate schedule.
| Annual taxable income (NZD) | Marginal rate |
|---|---|
| $0 to $15,600 | 10.5% |
| $15,601 to $53,500 | 17.5% |
| $53,501 to $78,100 | 30% |
| $78,101 to $180,000 | 33% |
| Over $180,000 | 39% |
Secondary employment and PAYE tax codes
People with more than one employment income source generally use a secondary tax code for additional employment. The withholding rate is based on estimated total annual income; it is not a separate final income tax.
| Code | Annual income from all sources | Secondary PAYE rate (before ACC) |
|---|---|---|
| SB | $0 to $15,600 | 10.5% |
| S | $15,601 to $53,500 | 17.5% |
| SH | $53,501 to $78,100 | 30% |
| ST | $78,101 to $180,000 | 33% |
| SA | Over $180,000 | 39% |
Rates shown exclude any applicable ACC earners' levy. See Inland Revenue's PAYE and secondary code guidance.
2. Tax residents and non-residents
New Zealand tax residents are generally assessed on worldwide income, subject to exclusions, transitional-resident rules and double tax agreements. Non-residents are generally taxed on New Zealand-source income. Residence depends on statutory tests, including presence and a permanent place of abode, rather than citizenship alone.
Non-residents receiving interest, dividends or royalties may be subject to non-resident withholding tax (NRWT). Without treaty relief, the general rates are 15% for interest, 30% for dividends and 15% for royalties; a double tax agreement may reduce these rates. The former article's general statement of a flat 20% tax on all non-resident income is not correct as a universal rule. See NRWT deduction rates, non-resident taxpayer guidance and treaty guidance.
3. Capital gains and taxable property disposals
New Zealand does not impose a comprehensive capital gains tax on every asset sale. However, gains may be taxable as income under specific rules, including:
- Sections CB 3 to CB 5: profit-making schemes and personal property acquired for disposal or traded in the course of business.
- Section CB 6: land acquired with a purpose or intention of disposal, subject to statutory requirements.
- Section CB 6A: the residential land bright-line test. For property sold on or after 1 July 2024, the relevant period is generally two years, subject to exclusions and rollover relief.
- Foreign investment rules: the foreign investment fund (FIF) and financial arrangements regimes can tax certain investment income or deemed returns even without a conventional sale.
Sales of a qualifying main home may be excluded from the bright-line test, but other land-taxing provisions can still apply. Read Inland Revenue's property rules and the Income Tax Act 2007, section CB 6A.
4. Corporate and business income tax
| Entity or business type | Income tax treatment |
|---|---|
| Most New Zealand companies | 28% of taxable profit |
| Self-employed sole traders | Individual progressive income tax rates |
| Māori authorities | 17.5% |
The company rate of 28% remains applicable to most companies; companies generally calculate taxable profit after allowable deductions. Provisional tax, GST, dividend imputation, and cross-border transfer-pricing or withholding rules may also apply. See official business tax rates.
5. Historical income tax rates: 2017-18
These figures are retained from the original article for the income year ending 31 March 2018. Do not use them for current PAYE or tax calculations.
| 2017/18 annual taxable income (NZD) | Marginal rate |
|---|---|
| $0 to $14,000 | 10.5% |
| $14,001 to $48,000 | 17.5% |
| $48,001 to $70,000 | 30% |
| Over $70,000 | 33% |
Secondary tax codes in 2017-18
| 2017/18 secondary code | Historical rate |
|---|---|
| SB | 10.5% |
| S | 17.5% |
| SH | 30% |
| ST | 33% |
Non-residents and companies in 2017-18
The original article referred to a 20% non-resident withholding figure. That was not a general tax rate for every non-resident taxpayer; the correct treatment depended on income type, tax code and applicable withholding or treaty rules. The standard company income tax rate was 28% in 2017-18, as it is for most companies today.
6. Official law and tax guidance
- Inland Revenue - individual tax rates and PAYE codes
- Inland Revenue - company and business rates
- Inland Revenue - residential property taxation
- Inland Revenue - non-resident withholding tax
- New Zealand Legislation - Income Tax Act 2007
This is a general guide. Legislative amendments, the income year, individual circumstances and treaty provisions determine the applicable treatment. Verify filing decisions with Inland Revenue or a qualified New Zealand tax adviser.