IRD Tax Rates Calculate Your PAYE Deductions
Did you know that even a small error in calculating your PAYE could cost you thousands annually? With the IRD tax rates for 2024 and 2025 now in effect, understanding your deductions is crucial to optimizing your take-home pay and retirement savings.
- PAYE (Pay As You Earn) is New Zealand’s system for deducting income tax, ACC levies, and KiwiSaver contributions directly from your salary.
- This guide breaks down the IRD tax brackets for 2024 and 2025, ACC levy updates, and KiwiSaver impacts, equipping you with tools to calculate your deductions accurately.
Income tax rates nz
New Zealand has progressive or gradual tax rates. The rates increase as your income increases.
From 1 April 2025
| For each dollar of income | Tax rate |
|---|---|
| 0 – $15,600 | 10.5% |
| $15,601 – $53,500 | 17.5% |
| $53,501 – $78,100 | 30% |
| $78,101 – $180,000 | 33% |
| $180,001 and over | 39% |
IRD Tax Brackets 2024 vs. 2025: Key Changes
New Zealand uses a progressive tax system, meaning higher income portions are taxed at higher rates. Below are the confirmed 2024 rates and projected 2025 thresholds (adjusted for inflation).
2024–2025 Tax Brackets Comparison
| Income Range (NZD) | 2024 Tax Rate | 2025 Tax Rate (Projected) |
|---|---|---|
| 0–0–14,000 | 10.5% | 10.5% |
| 14,001–14,001–48,000 | 17.5% | 17.5% |
| 48,001–48,001–70,000 | 30% | 30% |
| 70,001–70,001–180,000 | 33% | 33% |
| $180,001+ | 39% | 39% |
Key Takeaways:
- No changes to tax rates in 2025, but income thresholds may adjust slightly for inflation (awaiting IRD confirmation).
- Progressive taxation example: A 65,000earnerpays10.565,000earnerpays10.514,000, 17.5% up to 48,000,and3048,000,and3017,000.
ACC Levy: 2024–2025 Rates
The ACC Earners’ Levy funds injury compensation for workers. Rates are confirmed for 2024, with 2025 projections based on historical trends.
ACC Levy Impact
| Annual Income (NZD) | 2024 ACC Levy (1.39%) | 2025 ACC Levy (Est. 1.45%) |
|---|---|---|
| $30,000 | $417 | $435 |
| $70,000 | $973 | $1,015 |
| $120,000 | $1,668 | $1,740 |
Pros and Cons of ACC Levies:
| Pros | Cons |
|---|---|
| Covers all work injuries | Reduces net income |
| No claim paperwork | No opt-out for employees |
KiwiSaver Contributions: 2024–2025 Guidelines
KiwiSaver deductions affect your take-home pay but boost long-term savings. Below are employee/employer rates and potential 2025 changes.
KiwiSaver Contribution Tiers
| Employee Rate | Employer Minimum | Annual Cost (Employee @ $70k) |
|---|---|---|
| 3% | 3% | $2,100 |
| 6% | 3% | $4,200 |
| 10% | 3% | $7,000 |
2025 Outlook:
- No legislative changes announced, but experts recommend reviewing contributions after salary raises.
IRD Tax Rates (Calculate PAYE Deductions)
Follow these steps to estimate your 2024–2025 deductions:
- Determine Gross Income:
- Annual: $70,000
- Monthly: $5,833
- Apply Tax Brackets (2024):
- 0–0–14,000: 10.5% = $1,470
- 14,001–14,001–48,000: 17.5% = $5,950
- 48,001–48,001–70,000: 30% = $6,600
- Total Tax: $14,020
- **Subtract ACC Levy (1.39% of 70k):∗∗70k):∗∗973
- Deduct KiwiSaver (e.g., 3%): $2,100
- Calculate Net Pay:
- 70,000–70,000–14,020 – 973–973–2,100 = $52,907/year
Example Calculation (2024 vs. 2025)
| Component | 2024 Deductions | 2025 Projected Deductions |
|---|---|---|
| Income Tax | $14,020 | $14,020 |
| ACC Levy | $973 | $1,015 |
| KiwiSaver (3%) | $2,100 | $2,100 |
| Net Pay | $52,907 | $52,765 |
Tools for Simplifying PAYE Calculations
- PAYE Calculator: https://payecalculatornz.pro/
- MoneyHub’s Tax Guide: Free templates for salary breakdowns.
- Hnry: Automates deductions for freelancers and contractors.
Common Mistakes to Avoid
Misapplying Tax Brackets
Use progressive rates, not flat ones.
Forgetting Secondary Income
Bonuses or side hustles increase taxable income.
Overlooking Student Loans
12% repayment on income over $22,828.
- Misapplying Tax Brackets: Use progressive rates, not flat ones.
- Forgetting Secondary Income: Bonuses or side hustles increase taxable income.
- Overlooking Student Loans: 12% repayment on income over $22,828.
Visual Comparison: 2024 vs. 2025 Key Features
Infographic 1: Yearly Comparison Snapshot
- Take-Home Pay: Slight decrease in 2025 due to ACC levy hikes.
- KiwiSaver Growth: Employer contributions boost long-term savings.
Conclusion
Proactively calculating your PAYE ensures compliance and maximizes your income. Use our website tool or consult a tax advisor to refine deductions.