How PAYE is worked out
Your employer deducts PAYE from every pay. PAYE is made of two parts: income tax, charged in bands so only the income inside each band pays that band's rate, and the ACC earner's levy at 1.75%. KiwiSaver and student loan repayments are deducted on top if they apply to you.
NZ income tax rates 2026–27
| Income band (per year) | Tax rate |
|---|---|
| $0 – $15,600 | 10.5% |
| $15,601 – $53,500 | 17.5% |
| $53,501 – $78,100 | 30% |
| $78,101 – $180,000 | 33% |
| Over $180,000 | 39% |
On top of income tax, most employees also pay the ACC earner's levy of 1.75% on earnings up to $156,641 (a maximum of $2,741.22 a year).
Worked example: $85,000 salary
On a salary of $85,000, income tax is $17,927.50 (the first $15,600 at 10.5%, the next $37,900 at 17.5%, the next $24,600 at 30% and the last $6,900 at 33%), plus an ACC levy of $1,487.50. That leaves take-home pay of $65,585 a year — $1,261.25 a week — before KiwiSaver or student loan deductions. Try it above: set KiwiSaver to 3.5% and watch your take-home drop by $2,975 a year while the same amount goes into your retirement savings.
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Frequently asked questions
What is PAYE?
PAYE (pay as you earn) is the tax your employer deducts from your salary or wages before paying you. It includes income tax and the ACC earner's levy. Your employer sends it to Inland Revenue on your behalf.
What are the NZ tax rates for 2026–27?
10.5% on income up to $15,600, 17.5% up to $53,500, 30% up to $78,100, 33% up to $180,000 and 39% above that. Each rate applies only to the income inside its band.
How much ACC do I pay?
The ACC earner's levy is 1.75% of your earnings, charged on income up to $156,641 a year — so the most you can pay in 2026–27 is $2,741.22. It is included in your PAYE deductions.
Why is my payslip slightly different to this estimate?
Employers calculate PAYE per pay period using IRD tables and rounding, and your tax code, KiwiSaver rate or extra deductions (like child support or court fines) can change the result. This calculator annualises your pay for a close estimate.
What is the default KiwiSaver rate in 2026–27?
Since 1 April 2026 the default employee contribution is 3.5% of your gross pay (up from 3%), and your employer must contribute at least 3.5% as well. You can choose 4%, 6%, 8% or 10%.
Rates checked against official sources on 1 November 2026: IRD tax rates for individuals and IRD ACC earner's levy rates. See how we calculate for the full method and update log.