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These tables show estimates of the number of individuals in bands of taxable income up to $250,000 (for 2001-2008-09), and up to $300,000 (from 2009-10 onwards). It also shows aggregate taxable income and income tax for people in each income band. The income and tax information is derived from IR3 tax returns, personal tax summaries (to 2017-18), automatic income tax assessments (from 2018-19) and employer PAYE information.

Graph of taxable income distribution

 

Graph of aggregate taxable income declared by taxpayers in each income band

 

Notes

Data for the current tables was extracted from Inland Revenue systems on 14 December 2021. This release revises previously released information for all years from 2015-16 onward.

Because taxpayers have a year to file income tax returns if represented by a tax agent, these distributions are released with a lag. The 2019-20 table is now complete, but 2020-21 is not yet complete and will be included in the next release. The data in all tables up until and including 2014-15 was based on a random sample and has been scaled up to population estimates.

The sample was 10% of IR3 filers and 2% of other taxpayers. From 2015-16 onward population data is now used.

People coverage

There has been a structural break in the coverage of this data from the 2018/19 income year. The effect has been to increase the number of people covered by the tables, particularly those who earn only passive income, as indicated in the table below.

2001-2018 2019 onwards
Anyone who filed an IR3 personal tax return for that income year, even if they filed a nil return or a loss Included Included
Anyone who received a personal tax summary for that income year. Personal tax summaries were only calculated for selected, or "opt in" wage and salary earners who had not filed an IR3. Included N/A
Anyone who paid PAYE via an employer, including recipients of taxable welfare benefits, New Zealand Superannuation, earnings-related accident compensation income, student allowances, and paid parental leave, even if they did not file a return. Included Included
Anyone who received an automatic income tax assessment at year end. From 2019, these are created for anybody with income during the year from any source for which Inland Revenue holds information; for example wages and salaries, taxable welfare benefits and transfers, interest, dividends, and income earned through portfolio investment entities (PIEs) if it was taxed at the wrong rate N/A Included
People with no taxable income and who did not file a tax return Excluded Excluded
People who filed a non-resident return Excluded unless picked up in PAYE Excluded
People whose only income was from interest, dividends, or PIEs, all fully taxed at source so they did not, prior to 2019, need to file a tax return Excluded Included by way of automatic assessment
Children Included if they filed a tax return or had PAYE income such as a wage or salary Included if they filed or had automatic assessment income
People with part year income. Included if they filed or had PAYE income Included if they filed or had automatic assessment income

Taxable income

Taxable income for individuals is income on which their personal income tax is assessed for the March year. This is income from all taxable sources being assessed less allowable deductions and losses. People with negative income because of losses are recorded as having nil taxable income in the tables.

Income coverage in the tables has changed from 2018-19, as indicated in below:

2000-01 to 2017-18 2018-19 onwards
PAYE earnings such as wages, salaries, taxable welfare benefits, New Zealand Superannuation, earnings-related accident compensation income, student allowances, schedular payments, and paid parental leave. Included Included
Income sources specifically returned on the IR3 form such as self employment, shareholder salaries, estate or trust income, overseas income, partnership income, Maori authority distributions, rental income Included if IR3 filed Included if IR3 filed
Deductions such as brought forward losses, LAQC or look through losses received from companies, deductible expenses such as return preparation fees or schedular expenses Included if IR3 filed Included if IR3 filed
Interest and dividends Included only if IR3 filed or income disclosed for personal tax summary Included for all
PIE income (for example KiwiSaver earnings) Excluded Included if PIE used the wrong tax rate

Up until 2017-18, for people who are non-filers, taxable income was assumed to be (limited to) their total PAYE gross earnings in the year ended 31 March. This calculation did not include interest, dividends, KiwiSaver, or other PIE earnings. From 2018-19, these income streams are included (although for PIEs it is only if the PIE income was taxed at the wrong rate).

From 2018-19, the inclusion of additional people with passive-only income such as interest, dividend, and PIE income will have changed the overall distribution by introducing more low income earners, particularly children. Moreover, other people will now have bigger incomes through the inclusion of additional income streams from their investments. This is particularly true of people who did not previously file a tax return or receive a personal tax summary.

Income tax

Income tax for individuals is calculated based on their taxable income. The table displays income tax before any allowances for tax credits such as imputation credits or Working for Families tax credits. The low income rebate (to 2008-09), independent earner tax credit (from 2010) and tax rebates on the IR3 and personal tax summary are applied, but the calculation does not include the donations, housekeeper or redundancy rebates.

For people who are non-filers (2017-18), income tax is calculated as if they had instead filed an annual return. From 2018-19 such people will have an automatic annual assessment.

Last updated: 19 Nov 2020
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