Business Income Tax Calculator NZ 2026

How much income tax a New Zealand business pays depends far more on how it is structured than on what it earns. A company pays a flat 28% on its taxable profit, no matter how large or small that profit is. A sole trader pays at personal income tax rates, which start at 10.5% and step up to 39%, so a small profit is taxed more lightly than it would be inside a company and a large one considerably more heavily. A partnership is not taxed itself; each partner returns their share and pays at their own rate. Trusts pay a flat rate of their own. This calculator applies the right rate to the profit you enter for the structure you choose, so you can see the tax on the same earnings under each. It works on taxable profit, meaning revenue less deductible expenses, not on turnover and not on the money you draw out. What you take personally out of a company is a separate question with its own tax consequences, covered below.

How company tax works here

A company calculates its taxable profit, applies 28%, and pays that to Inland Revenue. The rate is flat, so there are no thresholds or bands to cross and no marginal rate to work out. If the company then distributes profit to shareholders as a dividend, it can attach imputation credits representing the tax it has already paid, which stops the same profit being taxed twice. A shareholder on a personal rate above 28% pays the difference; one below it can have the excess credited against other tax.

Once your residual income tax passes the threshold, you move onto provisional tax and start paying in instalments during the year rather than in a lump sum after it.

Worked example

These are the figures this page shows when you open it, before you change anything.

A company makes a taxable profit of $100,000 for the year. The company rate is a flat 28%, so the income tax is $28,000, and what remains stays in the company until it is distributed.

Change the structure and the same profit is taxed differently. A sole trader earning that profit pays at personal rates across the bands rather than a single flat rate, which is why the two structures cannot be compared on the headline percentage alone.

Why the structure matters more than the rate

The flat 28% looks attractive next to a top personal rate of 39%, and for profit that stays in the business it usually is. The comparison changes once you take the money out, because a dividend to a shareholder on the top rate attracts the difference between 28% and their own rate. The saving is a deferral rather than an exemption for anyone who intends to draw the profit personally.

Structure also carries costs that tax does not: a company means annual filing, separate records and director duties, and those are real money and real time against whatever the tax difference turns out to be.