New Zealand operates a relatively simple tax system that applies to individual residents and legal entities. New Zealand taxes are generally based on income, consumption, and, to a lesser extent, property.
This guide explains how New Zealand income tax works for both employees and self-employed individuals, the applicable rates, and how businesses registered or with operations in New Zealand are taxed.
Taxes in New Zealand: Key Takeaways
Taxes for Individuals in New Zealand
New Zealand income tax is calculated based on total income earned. This means earnings from New Zealand and foreign employment and investment income are taxed. Taxable income in New Zealand can include:
- Salary or wages
- Government benefits
- Schedular payments (withholding payments)
- Savings or investment interest
- Self-employment income
- Rental income
- Overseas earnings
How income is taxed
Some New Zealand residents are taxed before they receive their income. including salaries through PAYE (Pay As You Earn), government benefits or welfare allowance, and interest payments. The amount of income tax paid depends on the tax code provided by an employer or on completing an Inland Revenue Department tax code questionnaire.
Using the correct tax code is important, as New Zealand tax rates vary, which can mean underpaying or overpaying taxes.
Self-employed New Zealand tax residents, property owners earning rental income, and individuals earning foreign income are taxed at the end of the tax year, which runs from 1 April to 31 March. The total local and overseas income amount is subject to tax.
New Zealand Income Tax Rates
A progressive tax system applies in New Zealand.
Tax Rates as of 1 April 2025
| Income (NZD) | Tax Rate |
|---|---|
| $0 to $15,600 | 10.5 percent |
| $15,601 to $53,500 | 17.5 percent |
| $53,501 to $78,100 | 30 percent |
| $78,101 to $180,000 | 33 percent |
| Over $180,000 | 39 percent |
The more you earn, the higher your tax rate, but residents pay income tax at a rate relative to their earnings. For example, based on a New Zealand tax calculation for a New Zealand Golden Visa holder who earned NZD $100,000 in the tax year, the first $15,600 is taxed at 10.5 percent, the amount from $15,601 to $53,500 is taxed at 17.5 percent, the amount from $53,501 to $88,100 is taxed at 30 percent, and the rest is taxed at 33 percent.
Rather than a uniform 33 percent rate, a progressive rate applies different rates to each portion of income within each bracket.
Secondary tax
New Zealand secondary tax i is not a second tax, but a way to make sure the right PAYE is deducted from residents with multiple sources of income. This also avoids having to manage tax bills at the end of the New Zealand tax year.
Earnings are assigned a specific secondary tax code based on how much individuals are expected to earn annually. Below are the secondary tax rates and the relevant tax codes.
- $0 – $15,600 / 10.5 percent: SB
- $15,601 – $53,500 / 17.5 percent: S
- $53,501 – $78,100 / 30 percent: SH
- $78,101 – $180,000 / 33 percent: ST
- Over $180,000 / 39 percent: SA
Tailored tax rate: New Zealand tax residents may be able to apply for a tailored tax rate through the Inland Revenue. Tailored tax rates may apply to those earning a foreign pension, receiving scheduled payments, or receiving income into foreign accounts.
Tax residents can apply for a tailored tax code through their myIR account. If approved, a custom tax rate will be assigned based on their financial situation.
New Zealand Individual Tax Credits
The New Zealand government offers limited tax credits for individuals, including:
- Donation Tax Credit: Donors can claim credits for donations made to approved organizations, such as charities and schools.
- Independent Earner Tax Credit (IETC): Tax residents may be eligible for IETC if they earn between NZD $24,000 and $70,000 annually and do not receive government assistance or other state benefits. The tax credit is available to both employed and self-employed New Zealanders who are foreign tax residents.
Corporate Tax in New Zealand
The New Zealand corporate income tax rate is a flat rate of 28 percent for most companies. This applies to:
- Resident companies (on worldwide income)
- Non-resident companies (on New Zealand-sourced income)
Some Māori entities, such as the Māori Land Trusts & Incorporations and Mandated Iwi Organizations, benefit from a lower provisional tax rate of 17.5 percent.
Businesses looking to expand into New Zealand are advised to seek guidance from a New Zealand immigration agency to properly assess their tax liabilities.
Capital allowances and investment
Businesses generally cannot immediately deduct the full cost of capital investments for tax purposes. The deductions must be spread over time through depreciation.
Countries with more generous capital allowance rules tend to encourage investment, while stricter rules can increase the cost of doing business.
New Zealand Consumption Taxes (GST)
New Zealand’s sales or value-added tax (VAT) is the Goods and Services Tax (GST), which is applied to most goods and services. The standard GST rate is 15 percent. While some countries offer VAT exemptions for industries, such as agriculture and hospitality, New Zealand has very few GST exemptions, meaning most consumption is taxed.
Property Taxes in New Zealand
New Zealand property tax includes:
- Taxes on land and real estate (usually the local council rate applies)
- Wealth and inheritance taxes on property
There is no property transfer tax in New Zealand, but real estate owners must pay annual property taxes, which vary by local council.
Council tax rates differ from property to property since they are calculated using rating valuations. The figures below (in NZD) show average residential rates across major New Zealand cities, according to the Taxpayer’s Union. Properties valued near the local average typically have similar costs, unless extra targeted rates are included.
- Wellington: $2,972
- Auckland: $2,825
- Christchurch: $2,998
- Dunedin: $2,651
- Napier: $2,562
- Tauranga: $3,481
As a comparison, a foreign investor who consults a New Zealand Golden Visa lawyer to purchase an NZD $5 million home in Auckland can expect to pay around $14,000 to $18,000 annually, based on the Auckland Council tax rate of 0.30 to 0.35 percent. Meanwhile, in Wellington, a similarly priced property would incur about $17,000 to $23,000 per year, reflecting the higher Wellington City Council tax rate of 0.35 to 0.45 percent.
New Zealand Tax Treaties
New Zealand has tax treaties with 41 countries to prevent double taxation on the same income and promote international trade. Countries with which the New Zealand government has double taxation agreements include:
- United States
- Australia
- Canada
- China
- Japan
- United Kingdom
- EU countries
New Zealand’s double tax agreements are effective for optimizing expat taxes. Americans applying for the New Zealand Golden Visa for US citizens can avoid double taxation, as they’re required to file tax returns with the US government based on their citizenship.
New Zealand Taxes vs US Taxes
New Zealand’s tax system differs significantly from that of the United States:
| Tax Category | United States | New Zealand |
|---|---|---|
| Income Tax System | Progressive (federal + state taxes) | Progressive (national system) |
| Income Tax Rates | 10 to 37 percent (federal), excluding state taxes | 10.5 to 39 percent |
| Tax Basis | Citizenship-based taxation on global income | Residency-based taxation on global income |
| Inheritance and Capital Gains Tax | Yes (federal and sometimes state-level) | No general inheritance or capital gains tax |
| Sales Tax | State-level (0 to 10 percent or more) | 15 percent Goods and Services Tax |
| Corporate Tax Rate | 21 percent federal + variable state tax | 28 percent flat rate (17.5 percent for some Māori organizations) |
| Property Taxes | Annual property taxes (local government) | Local council rates based on property value |
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