Find out about: Work out tax rates and codes
Income tax rates for individuals
| Taxable income | Tax rate for every $1 of taxable income (excluding ACC earners' levy) |
Tax rate for every $1 of taxable income (including ACC earners' levy *) |
|---|---|---|
|
up to $38,000 |
19.5 cents |
20.9 cents |
|
$38,001 to $60,000 inclusive |
33 cents |
34.4 cents |
|
$60,001 and over |
39 cents |
40.4 cents |
|
No declaration ** |
45 cents |
46.4 cents |
|
Use the Tax on annual income calculator if you want to know the tax rates for previous years. | ||
| * The earners' levy rate for the tax year 1 April 2008 to 31 March 2009 is 1.4% ($1.40 per $100) | ||
| ** Employers are legally required to use the no-declaration rate when an employee does not fully complete the Tax code declaration (IR330). A completed form must include name, IRD number and tax code. The form must also be signed. | ||
Example 1
John's total taxable income for the year was $65,238. Here is how to work out the amount of tax due on the income:
| $0 to $38,000 |
|
|
|
$7,410.00 |
| $38,001 to $60,000 |
|
|
|
$7,260.00 |
| $60,001 to $65,238 |
|
|
|
$2,042.82 |
| $16,712.82 | ||||
Therefore the tax due on John's income of $65,238 was $16,712.82.
Example 2
Sarah's total taxable income for the year was $45,000. Here is how to work out the amount of tax due on the income:
| $0 to $38,000 |
|
|
|
$7,410.00 |
| $38,001 to $45,000 |
|
|
|
$2,310.00 |
| $9,720.00 | ||||
Therefore the tax due on Sarah's income of $45,000 was $9,720.00.
All employees must pay an ACC earners' levy to cover the cost of non-work related injuries. It is collected by Inland Revenue on behalf of the Accident Compensation Corporation (ACC).
Employers deduct the earners' levy from wages. It is included as a component of PAYE deductions.
Earners' levy is charged at a flat rate each year:
| Year | Levy rate |
|---|---|
| 1 April 2008 to 31 March 2009 | $1.40 per $100 (1.4%) |
| 1 April 2007 to 31 March 2008 | $1.30 per $100 (1.3%) |
| 1 April 2006 to 31 March 2007 | $1.30 per $100 (1.3%) |
| 1 April 2005 to 31 March 2006 | $1.20 per $100 (1.2%) |
| 1 April 2004 to 31 March 2005 | $1.20 per $100 (1.2%) |
| 1 April 2003 to 31 March 2004 | $1.20 per $100 (1.2%) |
| 1 April 2002 to 31 March 2003 | $1.20 per $100 (1.2%) |
| 1 April 2001 to 31 March 2002 | $1.10 per $100 (1.1%) |
| 1 April 2000 to 31 March 2001 | $1.30 per $100 (1.3%) |
Earners' levy is deducted on earnings up to an annually prescribed maximum:
| Year | Maximum earnings |
Levy |
|---|---|---|
| 1 April 2008 to 31 March 2009 | $102,922 | $1,440.91 |
| 1 April 2007 to 31 March 2008 | $99,817 | $1,297.62 |
| 1 April 2006 to 31 March 2007 | $96,619 | $1,256.04 |
| 1 April 2005 to 31 March 2006 | $94,226 | $1,130.71 |
| 1 April 2004 to 31 March 2005 | $92,189 | $1,106.26 |
| 1 April 2003 to 31 March 2004 | $88,728 | $1,064.73 |
| 1 April 2002 to 31 March 2003 | $87,185 | $1,046.22 |
| 1 April 2001 to 31 March 2002 | $85,795 | $943.74 |
| 1 April 2000 to 31 March 2001 | $84,636 | $1100.26 |
Income liable for earners' levy
Almost all earnings subject to PAYE are liable for earners' levy. They include:
- wages and salaries
- back pay and holiday pay
- overtime pay
- long-service pay
- bonuses or gratuities
- taxable allowances
- shareholder-employee salaries from which PAYE is deducted
- salaries to partners in a partnership.
Date published: 24 Apr 2008
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