NZ Tax Changes for 2025-26
What changed for the tax year starting 1 April 2025? Here's a summary of the key updates that affect your pay, deductions, and obligations.
Quick Summary
2025-26 is the first full year with the new income tax thresholds from Budget 2024 ($15,600/$53,500/$78,100). The ACC earner's levy rate increased from 1.60% to 1.67% and the cap rose to $152,790. Student loan threshold, KiwiSaver rates, and GST are unchanged.
Income Tax Brackets — New Full-Year Thresholds
Budget 2024 raised the first three income tax thresholds effective 31 July 2024. Because the change took effect part-way through the 2024-25 year, Parliament did not move the thresholds for that year — it kept the pre-Budget thresholds and blended the rates instead, weighted by the 121 days at the old rates and 244 days at the new. That gives 2024-25 an eight-band table with three composite rates (12.82%, 21.64%, 30.99%) that exist in no other year. The 2025-26 year is the first full year at the new levels.
| Taxable income | 2024-25 rate (composite) | 2025-26 rate (full year) |
|---|---|---|
| $0 – $14,000 | 10.5% | 10.5% |
| $14,001 – $15,600 | 12.82% | 10.5% |
| $15,601 – $48,000 | 17.5% | 17.5% |
| $48,001 – $53,500 | 21.64% | 17.5% |
| $53,501 – $70,000 | 30% | 30% |
| $70,001 – $78,100 | 30.99% | 30% |
| $78,101 – $180,000 | 33% | 33% |
| $180,001+ | 39% | 39% |
From 2025-26 the higher thresholds mean more income is taxed at lower rates. For example, income between $14,001 and $15,600 drops from 17.5% to 10.5%, and income between $48,001 and $53,500 drops from 30% to 17.5%. In 2024-25 those same dollars sat at the part-year composite rates of 12.82% and 21.64% — roughly a third of the way down, matching the four months the old rates were still in force.
Compare your take-home pay across both years →ACC Earner's Levy — Rate and Cap Increased
| 2024-25 | 2025-26 | |
|---|---|---|
| Rate | 1.60% | 1.67% |
| Earnings cap | $142,283 | $152,790 |
| Max levy | $2,276.52 | $2,551.59 |
Both the rate and cap increased. The rate rose from 1.60% to 1.67%, and the earnings cap jumped from $142,283 to $152,790. Most earners will see a modest increase in their ACC deduction.
KiwiSaver — No Change
Employee contribution rates (3%, 4%, 6%, 8%, 10%) and employer minimum contribution (3%) are unchanged. The $1,042.86 annual government contribution cap also remains the same.
Student Loans — No Change
The repayment threshold remains at $24,128/year ($464/week) with a 12% repayment rate on income above that threshold. This threshold was increased from $22,828 in 2023-24 and applies to both 2024-25 and 2025-26. Overseas-based borrowers still face a different repayment obligation.
GST — No Change
GST remains at 15%. The registration threshold stays at $60,000 annual turnover.
What This Means for You
- Most employees: Slightly more take-home pay thanks to the full-year effect of higher tax thresholds — up to ~$100/year more compared to the blended 2024-25 thresholds.
- Mid-range earners ($50k–$80k): Benefit most from the threshold changes, with more income taxed at 17.5% instead of 30%.
- All earners: Slightly higher ACC levy due to the rate increase from 1.60% to 1.67%, partially offsetting the tax threshold benefit.
- High earners ($150k+): Higher ACC cap means the levy applies to more of your income.
- KiwiSaver members: No change to contribution calculations.
Frequently asked questions
Did income tax rates change for 2025-26?
The five tax rates (10.5%, 17.5%, 30%, 33%, 39%) stay the same, but the bracket thresholds changed. Budget 2024 raised the thresholds from $14,000/$48,000/$70,000 to $15,600/$53,500/$78,100 effective 31 July 2024. The 2024-25 year used blended thresholds; 2025-26 is the first full year at the new levels.
Did the ACC levy change?
Yes. The ACC earner's levy rate increased from 1.60% to 1.67%, and the maximum earnings cap rose from $142,283 to $152,790. The maximum levy increased from $2,276.52 to $2,551.59.
Did the student loan threshold change?
The repayment threshold is $24,128/year ($464/week) for both 2024-25 and 2025-26. This was increased from $22,828 in 2023-24.
Related Tools
Sources: Inland Revenue, ACC.