Question 1

What is PAYE?

Accepted Answer

PAYE (Pay As You Earn) is the income tax your employer deducts from every pay and passes to Inland Revenue for you, so you don’t settle it all at once. Income is taxed progressively — each band at its own rate, from 10.5% on the first band up to 39% on the highest — and there is no tax-free threshold, so the first dollar is taxed.

Question 2

Is there a tax-free threshold?

Accepted Answer

No. Unlike some countries, New Zealand has no personal allowance — PAYE applies from the first dollar you earn, at the 10.5% rate on the lowest band. That often surprises people arriving from a market with a tax-free band at the bottom of their pay.

Question 3

Is ACC deducted from my pay?

Accepted Answer

Yes. The ACC Earners’ Levy is deducted alongside PAYE — a flat 1.75% of your liable earnings, up to a cap of $156,641 a year (so the levy is never more than $2,741.22 in a year). It funds cover for injuries that happen outside work, and it is a real deduction, separate from income tax.

Question 4

Do I have to be in KiwiSaver?

Accepted Answer

KiwiSaver is opt-in, so it only comes out of your pay if you’re a contributing member. You choose a rate off your gross — the default from 1 April 2026 is 3.5%, with 3.5%, 4%, 6%, 8%, 10% available. Your contribution reduces your take-home but does not reduce the income PAYE is charged on. Your employer contributes 3.5% on top of your pay — an employer cost that is never taken from your take-home.

Question 5

How do student-loan repayments work?

Accepted Answer

If you have a New Zealand student loan and earn salary or wages, 12% of every dollar you earn over the annual repayment threshold ($24,128 a year, about $464 a week) is deducted from your pay, on top of PAYE. It comes off your take-home and does not reduce the income PAYE is charged on.

Question 6

What is the IETC, and am I eligible?

Accepted Answer

The Independent Earner Tax Credit is a tax credit — up to $520 a year — for middle-income earners. To qualify you must be a New Zealand tax resident and NOT receiving Working for Families, an income-tested benefit, NZ Super or an overseas equivalent. Where you’re eligible it lowers the PAYE you pay, then tapers away by 13 cents for every dollar you earn over $66,000, reaching nil at $70,000.

Question 7

What tax year do these figures cover?

Accepted Answer

The 2026/27 tax year — 1 April 2026 to 31 March 2027. New Zealand’s tax year runs from 1 April to 31 March, not the calendar year, so a “year” in the calculator means that April-to-March window.

Question 8

Are the figures accurate?

Accepted Answer

The calculator uses the rates in force for the current tax year, but they have not been through this site's own review and sign-off. For official amounts, check with your employer or Inland Revenue.

Frequently asked questions