Most New Zealanders know their tax bracket - but your bracket rate is not your real marginal rate. Add ACC, student loan, and KiwiSaver, and the true cost of earning another dollar is often far higher than you expect. The IETC taper zone between $66,000 and $70,000 creates a hidden 13% surcharge on top of the 17.5% bracket. ACC disappears entirely above $156,641. Drag the income slider below to see exactly what every additional dollar costs you, right now, at any income level.
Enter your current salary and a proposed pay rise to see exactly how much of that raise you actually keep after all deductions. The calculator automatically detects any tax threshold crossings in the range.
The following table lists every significant threshold in the NZ personal tax system for the 2026/27 tax year (1 April 2026 – 31 March 2027). Understanding these boundaries helps you see exactly where your income sits and what changes when you cross each one.
| Threshold | Type | Value | What changes when you cross it |
|---|---|---|---|
| $0 | PAYE bracket starts | 0 – $15,600 | 10.5% income tax applies on every dollar up to $15,600 |
| $15,601 | PAYE bracket change | $15,601 – $53,500 | Tax rate increases to 17.5% on each dollar above $15,600 |
| $24,000 | IETC starts | $520/year credit | The Independent Earner Tax Credit begins. You receive up to $520/year, reducing your effective rate |
| $24,128 | Student loan threshold | 12% above threshold | Student loan repayments begin at 12% of every dollar above this annual threshold |
| $53,501 | PAYE bracket change | $53,501 – $78,100 | Tax rate increases to 30% on each dollar above $53,500 |
| $66,001 | IETC taper starts | –$0.13 per $1 above $66K | IETC begins reducing by $0.13 per dollar - adding an effective 13% to your marginal rate even though you're still in the 17.5% bracket |
| $70,000 | IETC fully tapered | $0 credit | IETC disappears entirely. The hidden 13% taper surcharge is over |
| $78,101 | PAYE bracket change | $78,101 – $180,000 | Tax rate increases to 33% on each dollar above $78,100 |
| $156,641 | ACC earners' levy cap | Max levy $2,741.22/year | ACC earners' levy no longer applies. This actually reduces your effective marginal rate by 1.75% |
| $180,001 | PAYE bracket change | $180,001 and over | Tax rate increases to 39% on each dollar above $180,000 |
The Independent Earner Tax Credit is designed to benefit middle-income earners. But between $66,000 and $70,000, it creates an effective marginal rate far higher than most people expect. While you're nominally in the 17.5% income tax bracket in this zone, you also lose $0.13 of IETC for every extra dollar earned. Combined with the 1.75% ACC levy, your true marginal rate in the $66,000–$70,000 zone is 17.5% + 1.75% + 13% = 32.25% - nearly double the stated bracket rate.
Add a 3.5% KiwiSaver deduction and the marginal rate reaches 35.75%, even though your tax bracket says 17.5%. This is why the stated bracket rate can be deeply misleading, and why this visualiser shows your true marginal rate rather than just your bracket rate.
Above $156,641, ACC earners' levy no longer applies. This creates an unusual effect where earning more above the cap actually comes with a lower marginal rate than below it - your effective marginal rate drops by 1.75% at this point. On the income between $156,642 and $180,000 you pay 33% income tax but no ACC, giving an effective marginal rate of 33% rather than the 34.75% you were paying just below the cap.
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