Changes to NZ income tax
The majority of New Zealand taxpayers now pay less tax every week thanks to changes to personal income tax rates introduced this month.
The income thresholds for all tax bands have been increased and the bottom tax rate has been decreased from 15% to 12.5% on income up to $14,000.
The income threshold for the 21% income tax rate has increased from $38,000 to $40,000 and the threshold for the 33% tax rate has increased from $60,000 to $70,000. The top tax rate of 39% now only applies to income over $70,001 per annum.
For Kiwi taxpayers earning between $20,000 and $35,000 per year, this means $11.92 less tax each week. For those earning between $40,000 and $60,000 it means $16.54 less tax per week.
The changes came into effect on October 1st. Because the new rates have been introduced part-way through the tax year (the New Zealand tax year is from April 1st to March 31st), an average of the new and old rates will be applied to your income for the 2008-2009 New Zealand tax year.
If you are an employee in New Zealand, your employer will apply the new tax rates to your salary or wages.
For more information on income tax in New Zealand, visit our New Zealand tax section.