A salary offer in New Zealand is quoted as a gross figure, before anything is taken out. What lands in your account is smaller, and the difference is made of two deductions: PAYE income tax and the ACC earners’ levy. KiwiSaver may reduce it further, but only if you choose to contribute. Here is how the numbers work for the tax year that runs from 1 April 2026 to 31 March 2027.
No tax-free threshold
The first thing that surprises people moving from the UK or Australia is that New Zealand has no tax-free allowance. Income tax starts on the very first dollar you earn. It is charged in progressive bands set by Inland Revenue: 10.5 percent up to $15,600, 17.5 percent from there to $53,500, 30 percent to $78,100, 33 percent to $180,000, and 39 percent on anything above $180,000. Because the bands are marginal, only the slice of income inside each one is taxed at that band’s rate, so a pay rise never leaves you worse off overall. These bands took effect on 1 April 2025 and are unchanged for 2026/27.
Lower earners are not left without help. In place of a tax-free amount, the independent earner tax credit can be worth up to $520 a year for people with one job earning roughly $24,000 to $48,000, and Working for Families tax credits top up the income of households with children. Neither is built into the gross-to-net sum, so your real position can be a little better than the headline tax suggests.
The ACC earners’ levy
On top of income tax sits the ACC earners’ levy, which funds cover for injuries that happen away from work. From 1 April 2026 it is charged at 1.75 percent of your earnings, and only up to a cap of $156,641. That caps the levy itself at $2,741.22 a year, so very high earners pay no more of it than someone on $156,641.
You can see both deductions worked out for any salary with the New Zealand salary calculator, or look at just the tax portion with the income tax calculator.
A worked example
Take a $60,000 salary in 2026/27. PAYE income tax comes to $10,220.50: 10.5 percent on the first $15,600, 17.5 percent on the band up to $53,500, and 30 percent on the last $6,500. The ACC levy adds $1,050, which is 1.75 percent of $60,000. Take-home pay is therefore $48,729.50 a year, about $4,061 a month. The total deductions work out to roughly 18.8 percent of the salary.
Move up to $80,000 and the picture shifts only a little: income tax is $16,277.50, the ACC levy is $1,400, and take-home pay is about $62,323 a year, an effective rate near 22 percent. The rise comes from more of the salary sitting in the 30 percent band, not from the whole amount being taxed more heavily.
Take-home pay across salaries
The table below runs the same 2026/27 bands and the 1.75 percent ACC levy across a range of salaries, with KiwiSaver and student loan left out so the base figures stand on their own. The effective rate is total deductions divided by gross pay, and it climbs slowly because only the income above each threshold moves into a higher band.
| Gross salary | PAYE income tax | ACC levy | Take-home pay | Effective rate |
|---|---|---|---|---|
| $40,000 | $5,908.00 | $700.00 | $33,392.00 | 16.5% |
| $60,000 | $10,220.50 | $1,050.00 | $48,729.50 | 18.8% |
| $80,000 | $16,277.50 | $1,400.00 | $62,322.50 | 22.1% |
| $100,000 | $22,877.50 | $1,750.00 | $75,372.50 | 24.6% |
| $120,000 | $29,477.50 | $2,100.00 | $88,422.50 | 26.3% |
Even at $120,000 the effective rate stays near 26 percent, well below the 39 percent top band, because that top rate only touches income above $180,000. The ACC levy adds a steady 1.75 percent until earnings reach the $156,641 cap, after which it stops growing.
KiwiSaver is your choice
KiwiSaver is a voluntary retirement scheme, and the contribution rate is yours to pick: 3, 4, 6, 8 or 10 percent of your gross pay. Because it varies from person to person, it is left out of the figures above. If you are enrolled at the default 3 percent, your take-home pay on $60,000 would be about $1,800 lower across the year, but your employer usually adds at least 3 percent on top, money set aside for your retirement rather than lost.
What else can change your pay
A few things this overview leaves out can move your real take-home pay. A student loan adds a 12 percent repayment on income above the annual threshold, around $24,128 for 2026/27, taken straight from your pay. A wrong tax code is a common reason a payslip looks off; the main code (M) suits most people with a single job, while a secondary code on a second job taxes the whole of that job at a flat rate. And because employers work PAYE out for each pay run rather than once a year, your payslip can differ from an annual figure by a few cents.
If you are comparing a New Zealand salary with one abroad, the purchasing power tool shows what each is really worth once local prices are taken into account, and the cost of living comparison does the same across countries and regions.
FAQ
Is KiwiSaver taken out of my salary? Only if you are enrolled. KiwiSaver is voluntary, and you choose a contribution rate of 3, 4, 6, 8 or 10 percent of gross pay. The figures here exclude it, so an enrolled saver takes home that percentage less, with an employer contribution added on top.
Why is there no tax-free amount? New Zealand taxes income from the first dollar at 10.5 percent rather than giving a tax-free band. Support for lower earners comes instead through the independent earner tax credit and Working for Families, which are claimed separately.
What is the ACC earners’ levy? It is a flat charge that funds cover for non-work injuries, set at 1.75 percent of earnings for the year from 1 April 2026 and capped once earnings reach $156,641, so the most anyone pays is $2,741.22.
Does this include student loan repayments? No. A New Zealand student loan adds a 12 percent repayment on income above roughly $24,128 a year for 2026/27, which would lower take-home pay further. It is not included in these figures.
Which year do these figures cover? The 2026/27 tax year, 1 April 2026 to 31 March 2027. The income tax bands are unchanged from 1 April 2025; the ACC levy of 1.75 percent and the $156,641 cap apply from 1 April 2026.
Sources: Inland Revenue tax rates for individuals, Inland Revenue ACC earners’ levy rates, MBIE setting the average ACC levy rates for 2025/26, 2026/27 and 2027/28. This is general information, not tax advice.