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Summary
New Zealand uses a PAYE (Pay As You Earn) system where employers deduct income tax, ACC earners’ levy, KiwiSaver contributions, and student loan repayments from each pay before it reaches your bank account. Most employees never need to file a tax return - the deductions are handled automatically.
This calculator shows exactly what comes out of your gross salary and what you take home, using 2025-26 IRD rates (from 1 April 2025).
How it works
Your take-home pay is reduced by four potential deductions:
- Income tax (PAYE) - progressive rates on different income bands
- ACC Earners’ Levy - a flat-rate accident compensation levy (not a tax, but mandatory)
- KiwiSaver - optional retirement savings deduction (3% default)
- Student loan repayment - 12% of income above the annual threshold
You may also receive the Independent Earner Tax Credit (IETC) if you earn between $24,000 and $70,000 and don’t receive government transfers - this reduces your income tax.
Income Tax Bands (2025-26)
New tax bands took effect from 1 April 2025:
| Taxable income | Tax rate |
|---|---|
| $0 – $15,600 | 10.5% |
| $15,601 – $53,500 | 17.5% |
| $53,501 – $78,100 | 30% |
| $78,101 – $180,000 | 33% |
| $180,001+ | 39% |
These are marginal rates - you only pay the higher rate on the income within each band, not on your total income.
The formula
Where
Independent Earner Tax Credit (IETC)
The IETC reduces income tax for eligible earners who don’t receive Working for Families, NZ Super, or similar government transfers:
| Annual gross income | IETC |
|---|---|
| Below $24,000 | $0 |
| $24,000 – $66,000 | $520 (full credit) |
| $66,001 – $70,000 | $520 − (income − $66,000) × 13% |
| Above $70,000 | $0 |
The IETC is applied automatically when you use tax code ME (main job + IETC). If you use tax code M, you don’t receive the IETC during the year (but may claim it at year-end if eligible).
ACC Earners’ Levy (2025-26)
| Detail | 2025-26 |
|---|---|
| Rate | 1.67% (GST-inclusive) |
| Maximum liable earnings | $152,790 |
| Maximum annual levy | $2,551.59 |
KiwiSaver
KiwiSaver is a workplace retirement savings scheme. Employee contributions reduce take-home pay:
| Rate | Annual deduction on $70,000 salary |
|---|---|
| 0% (opted out) | $0 |
| 3% (default) | $2,100 |
| 4% | $2,800 |
| 6% | $4,200 |
| 8% | $5,600 |
| 10% | $7,000 |
Your employer must also contribute a minimum of 3% - this does not reduce your take-home pay and is shown as a bonus in the results.
Student Loan Repayment (2025-26)
| Detail | Amount |
|---|---|
| Annual repayment threshold | $24,128 |
| Weekly threshold | $464 |
| Repayment rate | 12% of every dollar above threshold |
| Repayment ceiling | None |
Worked example
$70,000 salary, 3% KiwiSaver, no student loan, ME tax code
First $15,600 at 10.5%
= $1,638
Next $37,900 ($15,601–$53,500) at 17.5%
= $6,632.50
Remaining $16,500 ($53,501–$70,000) at 30%
= $4,950
Gross income tax
= $13,220.50
IETC: income $70,000 - phases out completely
= $0
Income tax after IETC (rounded to nearest dollar, as per IRD)
= $13,221
ACC Earners' Levy
= $1,169
KiwiSaver (3%)
= $2,100
Total deductions
= $16,490
Result
Take-home = $70,000 − $16,490 = $53,510/year ($4,459.17/month)
Verification
Manual calculations using 2025-26 official rates, cross-checked against paye.net.nz:
| Gross | KiwiSaver | Student loan | Tax code | Income tax | ACC | Take-home | Source |
|---|---|---|---|---|---|---|---|
| $30,000 | 0% | No | ME | $3,638 | $501 | $25,861 | paye.net.nz ✓ |
| $50,000 | 0% | No | ME | $7,138 | $835 | $42,027 | paye.net.nz ✓ |
| $50,000 | 3% | Yes | ME | $7,138 | $835 | $37,422 | Manual calc |
| $100,000 | 0% | No | M | $22,878 | $1,670 | $75,452 | Manual calc |
| $200,000 | 3% | No | M | $57,078 | $2,552 | $134,370 | Manual calc |
Assumptions & limitations
- 2025-26 rates only - the calculator uses rates in effect from 1 April 2025. It does not calculate prior-year rates.
- Salary/wage earners only - the calculator models PAYE for employed individuals. Self-employment, rental income, investment income, and schedular payments are not modelled.
- No Working for Families - WFF tax credits (IWTC, FTC, MFTC, etc.) depend on many household factors and are not included.
- No tailored tax codes - the calculator uses standard M/ME codes. Tailored tax codes (for special situations) are not modelled.
- NZ residents only - non-residents have different tax rules.
- KiwiSaver is pre-tax - contributions are deducted before any other calculations. The employer contribution (3%) does not affect PAYE.
- ACC levy is GST-inclusive - the 1.67% rate already includes 15% GST.
- Student loan assumes NZ-based borrower - overseas-based borrowers have different repayment rules and rates.
- IETC is auto-applied for ME code - users on M code (main job without IETC) should change to ME if eligible.