New tax rates for individuals effective FY2025

The new NZ government has made some serious changes to our tax system this year, in an effort to combat inflation and the cost of living crisis that we are currently facing.

As explained by Hnry, for example, according to Stats NZ, the median annual salary in 2013 was $43,888. This was taxed at an effective tax rate of 15.27%, so $6,700 in income tax.

The equivalent salary in 2023 would be $64,751, due to inflation. But because our tax rate thresholds don’t change with inflation, this salary would be taxed at an effective tax rate of 19.22%, resulting in a tax bill of $12,445.

NZ has progressive tax rates. The tax rate increases as your income increases.

Tax Rates effective from 1 April 2025

Tax Rates from 1 April 2024 to 31 March 2025

If your employee earns less than $70,000, they may need to complete a new IR330 and review that they are on the correct tax rate. You can access the form via the link below.

You can read more on how personal tax rates in NZ work here.