New Zealand Tax FAQs & Expert Guidance (2025/2026 (Runs April 1 – March 31))

Effective from July 31, 2024 (and applying across tax year 2025/2026), New Zealand's personal tax thresholds were increased to counter bracket creep: The 10.5% rate now applies to income up to $15,600 (previously $14,000); the 17.5% rate applies from $15,601 to $53,500 (previously $48,000); the 30% rate applies from $53,501 to $78,100 (previously $70,000); the 33% rate applies from $78,101 to $180,000; and the top rate of 39% applies to all income exceeding $180,000. Employees also pay the ACC Earners' Levy of 1.60% on income up to the maximum cap of $142,283.

Under New Zealand's Pay As You Earn (PAYE) system, employers automatically deduct income tax, ACC Earners' Levy, student loan repayments, and KiwiSaver contributions from each paycheck before depositing your net wages. KiwiSaver is a voluntary work-based retirement savings scheme. New employees are automatically enrolled and can choose a contribution rate of 3%, 4%, 6%, 8%, or 10% of their gross salary. If you contribute at least 3%, your employer is legally required to contribute an additional minimum 3% (subject to Employer Superannuation Contribution Tax / ESCT). The government also provides an annual Government Contribution (Member Tax Credit) of up to $521.43 if you contribute at least $1,042.86 between July 1 and June 30.

Goods and Services Tax (GST) in New Zealand is a broad-based consumption tax of 15% charged on most goods and services supplied in New Zealand, as well as imported items. Unlike VAT in many countries, New Zealand GST has virtually no exemptions: it applies to groceries, clothing, services, and commercial transactions (financial services and residential rent are exempt). You must register for GST with Inland Revenue if your gross business turnover exceeded $60,000 over the past 12 months, or is expected to exceed $60,000 over the next 12 months. GST returns can be filed monthly, two-monthly, or six-monthly via myIR.

New Zealand has no general capital gains tax on shares, business sales, or personal assets. However, under the Bright-Line test, profits from the sale of residential property may be treated as taxable income. Effective July 1, 2024, the Bright-Line period was shortened to 2 years for all residential property sales (reducing the previous 5-year or 10-year holding requirements). If you sell a residential property within 2 years of acquisition, net profits are taxed as ordinary income at your marginal tax rate (up to 39%), unless the property qualifies for the 'main home' exemption or was inherited.