Taxable income distribution of individuals

These tables show estimates of the number of individuals in bands of taxable income up to:

• $250,000 for the 2001 to 2009 tax years
• $300,000 from the 2010 tax year onwards.

They also show aggregate taxable income and income tax for individuals in each income band. The income and tax data is derived from:

• personal tax summaries until the 2018 tax year,
• automatic income tax assessments from the 2019 tax year
• IR3 tax returns,
• employer PAYE information.

You can download data in tables on income distributions of individuals from the 2001 to 2021 tax years at the bottom of the page. This updated data previously published for the 2019 and 2020 tax years. The 2022 income tax year will be published in in December 2023, as tax agents have a year to file their clients returns.

Data for the tables and graphs was extracted from Inland Revenue systems on 25 November 2022.

Graph of individuals taxable income distribution

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

Graph of aggregate income tax assessed for individuals in each income band

Individuals with taxable income between $0 and $100 are not included in the above graphs. This is because of high volumes and small amounts in aggregate. The data for these groups is available in the download link at the bottom of the page.

The graphed distributions show spikes of increased volumes of individuals at various taxable income levels below $30,000. This reflects transfers of taxable income tested benefits and New Zealand Super. Other spikes occur near the personal tax thresholds of $14,000, $48,000 and $70,000, after which the personal tax rate increases. In the 2001 tax year the thresholds were different and the spikes instead occurred at $38,000 and $60,000 of taxable income.

The graphed distributions stop at $150,000 of taxable income but the upper limits are available in the download link at the bottom of the page. The 2021 tax year contains higher than usual incomes towards the top of the income distribution. This reflects a release of imputed dividends from companies in advance of the 39% tax rate applying to personal incomes over $180,000 from the 2022 tax year.

Further information on the methodology for calculating these statistics available in the notes below.

Data source

The data in the graphs and tables up to and including the 2015 tax year is based on a random sample of individual taxpayers and has been scaled up to population estimates. The sample comprised 10% of IR3 filers and 2% of other taxpayers, scaled up by weights of 10 for IR3 filers and 50 for other taxpayers to create population estimates.

Population data has been used from the 2016 tax year onwards.

Coverage of individuals

The statistics are based on personal tax return (or square-up) information, boosted by PAYE data for people without a tax return.

There has been a structural break in the coverage of this data from the 2019 tax year. The effect has been to increase the number of individuals included in the tables and graphs through the inclusion of individuals who earn only passive income, as indicated in the table below. 

Coverage of taxable income

Taxable income for individuals includes all assessable income less allowable deductions and losses claimed. Individuals with negative income, because of losses, are recorded as having nil taxable income in the tables. It is calculated on a March tax year basis.

The coverage of income included in the tables has changed from the 2019 tax year, as is indicated below:

Taxable income definition

Up until (and including) the 2018 tax year, the definition of taxable income for non-fliers only included the total gross PAYE earnings. The calculation did not include: 

• interest,
• dividends,
• KiwiSaver,
• other PIE earnings.

From the 2019 tax year, all of the above income types have been included in the definition of taxable income. Although for PIE earnings it is only if it was taxed at the wrong rate.

Why we widened the definition

Widening the definition of taxable income has changed the overall distribution of taxable income from the 2019 tax year by:

• introducing more low-income individuals into the distribution
• increasing the taxable income of individuals whose interest, dividend and PIE income was not previously included.

A new income group of individuals with income between $0.01 and $100 has been added to the tables from the 2019 tax year to assist in identifying the impact of including more low income individuals into the time series.

Income tax calculation

Income tax for individuals is calculated based on their taxable income as defined above, before including any:

• tax credits such as imputation credits,
• overseas taxes paid,
• Working for Families tax credits.

The following tax credits are applied:

• the low-income rebate (up to the 2009 tax year),
• independent earner tax credit (from the 2010 tax year)
• tax rebates on the IR3 and personal tax summary.

The calculation does not include the donations or housekeeper rebates which were returned separately.

PAYE earners who do not file returns

From 2001 to 2018, individuals who earned PAYE income but did not file their return have their tax calculated as if they had instead filed an annual return. From the 2019 tax year these individuals will have received an automatic annual assessment.