These tables show estimates of the number of individuals in bands of taxable income up to $250,000 (2001-2009), and up to $300,000 (from 2010 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 2018), automatic income tax assessments (form 2019) and employer PAYE information.
Graph of taxable income distribution
Graph of aggregate taxable income declared by taxpayers in each income band
The years refer to income years ended 31 March. For example 2018 refers to taxable income earned in the period 1 April 2017 to 31 March 2018. Tax returns filed more than two years after the end of the income year are not included in the tables. The 2018 table is now complete, but 2019 data will not be considered complete until after 31 March 2021. Data for the current tables was extracted from Inland Revenue systems on 10 September 2020.
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.
|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 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|
The data in all tables is based on a random sample, and has been scaled up to population estimates. The sample is 10% of IR3 filers and 2% of other taxpayers.
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 2019, as indicated in below:
|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 2018, 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 2019, these income streams are included (although for PIEs it is only if the PIE income was taxed at the wrong rate). From 2019, 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 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 2009), 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 (up to 2018), income tax is calculated as if they had instead filed an annual return. From 2019 such people will have an automatic annual assessment.