Personal Tax History 1970-25 Table
New Zealand Personal Tax System (1970–2025) (Tax brackets apply to annual taxable income. All monetary values in NZD. “Resident” refers to NZ tax residents; non-residents are taxed only on NZ-sourced income.)
1. Master Table – Tax System by Year/Range (1970–2025)
| Year(s) | Resident Tax Brackets & Rates | Non-Resident Tax Brackets & Rates | Personal Tax Credits | Levies & Deductions | Notes |
|---|---|---|---|---|---|
| 1970–1971 | Progressive rates from 0% up to 67.5% on income over \$13,841. Example: first \$275 exempt; 7.85% from \$275; then rising through 12+ brackets to 66% at \$8,000 and 67.5% above \~\$12,000. A temporary 10% “Mini-Budget” surcharge applied Dec 1970–Jul 1971, effectively raising top rate to \~69.75%. | Same nominal rates, but non-residents ineligible for low-income exemptions. (At this time a small personal exemption applied only to residents.) | None. (Personal exemptions were built into brackets; no separate credits yet.) | Social Security Tax: 7.5% flat “social security” income tax (SSIT) was merged into main tax scale by 1970. ACC: No earner levy yet (ACC scheme began 1974). | 1970 reform (Muldoon’s budget) merged SSIT with income tax and set a new scale with 50% top rate (after surcharge period). High top rates reflected post-war progressive taxation. Bracket creep from inflation was becoming significant. |
| 1972–1975 | Top rate 50% (from \$12,000 upward). Many narrow brackets: e.g. 21% starting at \$650, gradually up to \~48% by \$8,000, then 50% above \~\$12,000. 1972–73: A one-off 7.5% rebate reduced all tax rates (effective top \~46.25%). | Same statutory rates (50% top), but non-residents could not claim the 1972 rebate. No other non-resident adjustments noted. | Family Benefit: Universal family benefit (cash payment per child) in place (not a tax credit). No specific tax credits. | ACC: Accident Compensation scheme introduced 1974 (no-fault injury cover). Initially funded by general taxes and employer levies; no direct earner levy on employees until later. | Labour govt (1972–75) maintained the 50% top rate. In 1972–73 a temporary tax rebate effectively cut rates by 7.5%. 1974 saw creation of ACC and a compulsory superannuation scheme (later repealed) – these affected fiscal policy but not the basic tax brackets. |
| 1976–1977 | Top marginal rate remained 50%. Brackets structure similar to early 1970s (no evidence of major changes). Bracket thresholds eroded by high inflation, pushing many into top 50% bracket (“fiscal drag”). | Same nominal rates (50% top). Non-residents were taxed on NZ income at normal scale, but could not access resident exemptions/allowances (no special non-resident scale). | No new credits. (Tax relief primarily via periodic adjustments to brackets or ad hoc rebates.) | National Super: A universal pension for 65+ introduced 1977, funded from general tax (no surcharge yet). ACC: Ongoing employer levies; any earner levy minimal or still absent (ACC costs largely in general budget by late 1970s). | Muldoon’s National government (elected 1975) initially held tax rates steady but faced pressure from inflation. No indexation meant real tax burdens rose (“bracket creep”). Preparations were underway for a tax cut package in 1978. |
| 1978–1981 | 1978 reform: Introduced broader brackets and higher top rate. E.g. by 1981: 14.5% up to \$5,000; 35% on \$5k–11,683; 48% on \$11,684–16,266; 55% on \$16,267–22,000; 60% on income over \$22,000. (These 5 brackets were set in 1978 and minor threshold tweaks were made 1979–81.) | Same rates (60% top by 1981). Non-residents could not claim any low-income exemptions (NZ abolished tax-free thresholds, so first dollar was taxed). Otherwise identical scale. | No personal credits. (Universal family benefit continued; no targeted tax credits yet.) | ACC: Still no direct earner levy in PAYE; ACC funded via employer levies and general tax. Other: No separate payroll tax (Muldoon’s brief 1970 payroll tax had been repealed). | Muldoon’s 1978 tax cut package aimed to counter “fiscal drag”. It lowered bottom rates and extended middle brackets, but raised the top rate from 50% to 60%. This broadened the tax base; even average earners started paying mid-high rates. High-income earners faced 60%, contributing to tax avoidance schemes in this period. |
| 1982–1986 | 1982 Muldoon tax cuts: New 5-bracket scale effective 1983–86: 20% up to \$6,000; 31% on \$6,001–24,000; 41% on \$24,001–30,000; 51% on \$30,001–38,000; 60% over \$38,000. Temporary surtax: A 10% surtax on top three brackets (41%→45.1%; 51%→56.1%; 60%→66%) from 1982 remained in force through Sep 1986. Effective top rate was 66% under Labour until late 1986. | Same marginal rates (20–60%, plus surtax on top brackets). Non-residents could not claim personal rebates, e.g. the general low-income exemption had been removed, and they were ineligible for any family tax credits if abroad. Thus non-residents effectively paid the full surtaxed rates on all income. | Family Tax Credit (Family Support): Introduced 1986 to assist low-income families with children. Replaced previous universal family benefit with means-tested Family Support payments delivered through the tax system (refundable credit). No credits for individuals without children yet. | ACC Earner’s Levy: Introduced by mid-1980s as a flat levy on employment income (initially \~1%). By 1986, an earners’ levy was collected with PAYE to fund ACC’s “Earner Account” (non-work accident cover). Super Surcharge: From 1985, a surtax on National Superannuation applied to high retiree incomes (not part of PAYE brackets, but a claw-back of pension). | Facing ongoing fiscal drag and a 66% top rate, evasion grew. Muldoon’s 1982 package cut taxes for middle earners (widening the 31% band to cover most “blue-collar” wages). To blunt criticism that it favored the rich, he added the “temporary” 10% surtax on top brackets. The Fourth Labour Govt (from mid-1984) kept that surtax in place until 1986, maximizing revenue before reform. |
| Oct 1986 – 1987 | Tax reform part I: As of 1 Oct 1986, the top two brackets were removed (rates above 48% eliminated). New interim scale (1986–87): 17.5% up to \$6,000; 24% on \$6,001–9,500; 31.5% on \$9,501–25,000; 37.5% on \$25,001–30,000; 52.05% on \$30,001–38,000; 57% over \$38,000. (Result of removing 66% surtax and cutting base rates.) | Same nominal rates (17.5–57%). Non-residents did not benefit from any transitional rebates and paid according to this scale. No personal credits available to non-residents. | No new credits. (Family Support continued; no individual credits yet.) | GST introduced (1986): A 10% Goods & Services Tax launched 1 Oct 1986, allowing income-tax broadening. ACC: Earner levy \~1% continued. | Major 1986 reform by Finance Minister Roger Douglas: introduced GST and sharply lowered income tax rates (top rate fell from 66% to 57%). The two highest brackets were slated for removal in the next step of reform, moving toward a much flatter tax system. |
| 1988–1989 | Tax reform part II (flat tax debate): By Oct 1988, a two-tier scale was implemented: 24% bottom rate, 33% top rate. (All income over a modest threshold taxed 33%.) To prevent low-income earners from paying more due to the 24% first-dollar tax, a Low Income Earner Rebate was introduced in 1988. For 1988–89: rebate up to \$855 per year (phasing out from \$9,500 at 4c per dollar, gone by \~\$30,875) effectively made the first \$9.5k taxed \~15%. From 1 Apr 1989, the tax scale was fully two-tier: 24% up to \$30,875; 33% above that. (The effective bottom rate for those earning above \$38k was \~19.5% after rebate phase-out.) Top rate now 33%. | Same statutory rates (24/33%). Non-residents did not qualify for the Low-Income Rebate, so their effective bottom rate remained 24%. Otherwise identical brackets. | Low-Income Rebate: (See resident column.) No other personal credits. Family Support continued (increased in late ’80s). | ACC: Earner’s levy \~1% on income (collected via PAYE). Super surcharge: High-income retirees still paid surcharge on NZ Super (continued until 1998). | The Fourth Labour Government completed its “broad-base, low-rate” overhaul. Top tax fell to 33% in 1988, dramatically down from 66% six years prior. Roger Douglas even proposed a flat \~23% rate, but PM Lange rejected it. Instead, a two-bracket system emerged. To cushion low earners from the loss of tax-free thresholds, a Low-Income Rebate was used as a de facto tax-free zone. |
| 1990–1996 | Two-bracket system persisted. 1990–96: 24% on income up to \$30,875; 33% above. The Low-Income Earner Rebate (max \~\$450–\$500) effectively reduced the bottom rate to \~15–20% for those under the phase-out threshold. No changes in rates or thresholds until 1 Jul 1996. | Same 24/33 rates. Non-residents could not claim the rebate, paying a flat 24% on first \$30,875. | Family Support Tax Credit: Continued (inflation-adjusted). No new credits for individuals. (Tax relief for low earners came via the rebate.) | ACC Levy: \~1% earner levy ongoing. Student Loan Withholding: From 1992, student loan scheme introduced; 10% repayment deducted from income above a threshold (not a tax per se, but a payroll deduction for graduates) – affecting net income for some earners. | The 1990s began with a deep recession; despite campaign promises of tax cuts, the incoming National government delayed changes. The two-tier structure (24%/33%) remained until mid-1996. Fiscal constraints and a focus on deficit reduction meant no immediate tax rate cuts. Instead, assistance to families was increased (Family Support), and the superannuitant surcharge stayed in force (a political issue throughout the 1990s). |
| Jul 1996 – 1999 | 1996–97 cuts: From 1 Jul 1996, bottom rate cut to 21.5% (threshold raised to \$34,200); 33% over \$34,200. From 1 Jul 1997, bottom rate 19.5% up to \$38,000; 33% beyond \$38k. (By Apr 1998 the full new scale was in place: 19.5% ≤ \$38k; 33% > \$38k.) The Low-Income Rebate was adjusted accordingly and then phased out after 1 Apr 1999 as the 19.5% rate made it less necessary. Effective tax for low earners was \~15% on first \~\$9k during phase-out period. Top rate remained 33%. | Same rates for non-residents (19.5/33). Non-residents could not claim the low-income rebate (which was being reduced), but after 1998 the bottom rate was a true 19.5% for all taxpayers anyway. | Low-Income Rebate: Gradually reduced as rates fell (effectively gone by 1999). Family Tax Credits: Child Tax Credit (CTC) introduced 1996 (an in-work credit for families off welfare). Family Support increased. No credits for individuals without children. | ACC: Earner levy \~1.2% (varied year to year). Super surcharge: Still in effect (peaked at 25% on extra income); abolished in 1998, increasing net incomes of pensioners. | Under National’s “Working Nation” tax package (1996), the first significant tax cuts since 1988 were implemented. The aim was to “make work pay” – hence lower bottom rates and higher thresholds. The two-step scale persisted. By 1999, NZ had a low top rate (33%) by international standards. Meanwhile, targeted support via the tax system grew: Child Tax Credit rewarded working families, and the unpopular superannuation surcharge was finally removed in 1998. |
| 2000–2008 | 2000 changes: Fifth Labour Govt added a new top bracket: 39% on income over \$60,000 (effective 1 Apr 2000). Lower brackets stayed: 19.5% up to \$38,000; 33% \$38k–60k; 39% \$60k+. Low-Income Earner Rebate of up to \~\$450 persisted, effectively reducing the bottom rate to 15% on first \~\$9,500 of income. (For those above \$38k, the first \$38k was effectively taxed 19.5%.) Brackets and rates remained unchanged through Sep 2008. | Same bracket structure (19.5/33/39). Non-residents paid identical rates but could not receive the low-income rebate, so their effective bottom rate was \~19.5% from the first dollar. | Working for Families (WFF): Introduced in stages 2004–07. It consolidated family credits: Family Support renamed Family Tax Credit, Child Tax Credit replaced by In-Work Tax Credit in 2006, plus Minimum Family Tax Credit (income floor) and Parental Tax Credit (newborn support). Independent Earner Rebate: None yet. | ACC: Earner levy \~1.2–1.4% (e.g. 1.3% in 2005). KiwiSaver: Introduced 2007 – not a tax, but a retirement savings scheme with contributions deducted from pay (default 4%, later 3%). Student loans: repayment obligation 10% (then 12%) of income over threshold; made interest-free in 2006 for NZ-residents. | Labour’s 2000 move raised the top rate to 39% for incomes >\$60k, reversing some of the 1980s cuts for high earners. Middle and low rates stayed the same (19.5% and 33%). Over 2005–2008, the Working for Families package substantially expanded tax credits for families with children, using the tax system to deliver social assistance. By 2008, about 45% of families with children were receiving WFF payments. No broad tax bracket adjustments were made in this period, so fiscal drag began increasing the tax take. |
| Oct 2008 – 2010 | 2008–2010 tax cuts: The outgoing Labour government scheduled modest cuts from 1 Oct 2008: bottom rate to 12.5% (threshold \$14k); 21% up to \$40k; 33% to \$70k; top 39% over \$70k. The new National Government (elected Nov 2008) kept the 1 Oct 2008 changes and further reduced the top rate to 38% from 1 Apr 2009. Post-1 Apr 2009 brackets: 12.5% \$0–14k; 21% \$14k–48k; 33% \$48k–70k; 38% \$70k+. An additional cut from 21% to 20% was planned for 2011 but deferred due to the global financial crisis. | Identical rates for non-residents (12.5, 21, 33, 38). Non-residents were also eligible for the 12.5% low bracket (since by 2008 the low-income rebate had been folded into the rate structure). Non-residents still ineligible for WFF or other credits. | Independent Earner Tax Credit (IETC): Introduced 1 Apr 2009 – \$10/week (\$520/year) for individuals earning \$24k–\$48k with no dependent children and not on welfare. Abated 13c/\$ from \$44k (fully gone at \$48k). Working for Families: thresholds raised and credit amounts increased (2008) as part of tax package. | ACC: Levy around 1.3%–1.7%. (In 2010, earners’ levy was \~\$1.70 per \$100.) Earthquake levy: None on income (EQ recovery levies were on insurance). Student Loan: repayment rate increased to 12% from 2009. | In late 2008, facing an economic downturn, both major parties agreed on tax relief. Labour’s pre-election cut (Oct 2008) lowered the bottom rate to 12.5%. National’s government then lowered the top rate to 38% in 2009. Further promised cuts were canceled amid the 2008–09 financial crisis. Notably, 2009 saw the debut of the Independent Earner Tax Credit to benefit middle-income individuals without children. This partially replaced the old low-income rebate (which had been absorbed into the 2008 rate adjustments). |
| Oct 2010 – 2017 | 2010 reform: From 1 Oct 2010, new rates: 10.5% \$0–14k; 17.5% \$14k–48k; 30% \$48k–70k; 33% over \$70k. (This was a major across-the-board tax rate cut, alongside a GST increase to 15%.) These 10.5/17.5/30/33 rates and thresholds remained unchanged through 2017. Top rate 33%. | Same brackets for non-residents. Non-residents cannot claim the Independent Earner Tax Credit or WFF, but otherwise pay 10.5/17.5/30/33 on NZ income. | Independent Earner Tax Credit: continued (\$520/year for \$24k–\$48k earners). Working for Families: continued; minor tweaks (e.g. inflation adjustments on credit amounts paused). No new credits. | ACC: Earner’s levy \~1.7% then gradually reduced to \~1.39% by 2017. KiwiSaver: From 2013, minimum contribution 3% (employee and employer each). Student Loan: no interest for residents; 12% withholding above \~\$19k. | The 2010 Budget tax changes were a significant realignment: income tax rates dropped by 1–3 percentage points while GST rose from 12.5% to 15%. The goal was to shift taxation toward consumption and improve work incentives. The top income rate remained 33% (unchanged since 2000 except the brief 38% in 2009). During 2010–2017, bracket thresholds were not adjusted, so fiscal drag quietly increased revenue. The IETC and WFF credits remained to support target groups. |
| 2018–2020 | No changes (2018–20): Rates still 10.5%, 17.5%, 30%, 33% (thresholds \$14k, \$48k, \$70k). Top rate 33%. (Bracket thresholds last altered in 2010; by 2020 around 20% of earners were in the top 33% bracket due to wage growth.) | Same 10.5/17.5/30/33 structure. No special non-resident rates. (Non-residents remained ineligible for personal tax credits like IETC, but otherwise taxed at these rates.) | Independent Earner Tax Credit: still in effect (unchanged). Working for Families: increased slightly in 2018 (higher Family Tax Credit amounts, slightly faster abatement) – part of Families Package. Other: KiwiSaver tax credit (government contribution of up to \$521 for savers) existed but not an income tax credit. | ACC: Levy \~1.39% (2018–20). Research & Development Tax Credit (2019): 15% credit introduced for businesses’ R\&D expenditure (not personal, but corporate incentive). | The Labour-led government elected in 2017 focused on family support rather than changing income tax rates. It boosted Working for Families in 2018 (more generous family credits) but left personal tax brackets untouched. By 2019–20, inflation had not been reflected in thresholds for a decade, leading to noted “bracket creep” – a greater share of taxpayers falling into higher tax bands. Political discussion turned to whether to adjust thresholds, but no changes were implemented in this period. |
| 2021–2025 | 2021 change: New top bracket introduced: 39% on income above \$180,000 (effective 1 Apr 2021). Lower brackets remain 10.5% ≤\$14k; 17.5% ≤\$48k; 30% ≤\$70k; 33% ≤\$180k. No inflation adjustment to thresholds (the \$14k, \$48k, \$70k levels set in 2010, and \$180k added in 2021). | Same rates for non-residents. (They benefit from the same brackets, including 39% only above \$180k.) Non-residents still cannot claim IETC or WFF credits, and do not get NZ’s tax-free KiwiSaver bonus. | Independent Earner Tax Credit: still \$520/year for \$24k–\$48k earners (not on govt benefits). Working for Families: ongoing; minor increases to credits, but abatement thresholds largely unchanged since 2018 (reducing real value). No new personal credits. (COVID-19 income support in 2020–22 was delivered outside the tax system.) | ACC: Levy \~1.39% (2021) rising to \~1.53% by 2024, capped at earnings around \$130k–\$140k. COVID-19 Relief: Temporary wage subsidies in 2020–21 (not a tax measure). No wealth or social security tax: NZ still has no separate social security payroll tax. | The Labour government in 2021 added a new 39% top rate for high earners (over \$180k), partly to address equity and raise revenue. This marked the first rate increase since 2000. By 2025, aside from that new top bracket, NZ’s personal tax structure remains as set in 2010. The absence of inflation-indexing means more middle-income earners creep into higher brackets each year. Debates continue on adjusting thresholds and the role of tax credits, but any major reform is pending electoral outcomes. |
Sources: Historical tax rates and thresholds are drawn from Public Information Bulletins and official yearbooks, Parliamentary analyses, and tax reform documentation. Personal tax credit information is based on NZ legislation and government releases. Levy data from Inland Revenue and ACC reports. (See specific citations in table.)
2. Subtables – Detailed Components
- A. Tax Brackets and Rates (Residents vs Non-Residents):
| Period | Residents – Brackets and Marginal Rates | Non-Residents – Brackets and Rates |
|---|---|---|
| 1970–1971 | 0% on first \~\$275; then 7.85%, 21%,… gradually to 66% at \$8,000; 67.5% above \~\$12,000. (10% surcharge applied late 1970–71, raising effective top to \~69.8%.) | Same nominal rates, but no personal exemption – first \$1 taxed (residents had \$275 exempt). Top effective \~69.8% with surcharge. |
| 1972–1977 | 21% from \$650; graduations \~3–4% each \$500–\$1k interval; 50% top rate from \~\$12k upward. (1972–73 had 7.5% rebate on tax owed, effectively cutting all rates). | Same statutory rates (50% top). Non-residents couldn’t claim the 7.5% rebate in 72–73, so paid full rates. Otherwise identical bracket thresholds. |
| 1978–1981 | 14.5% ≤ \$5,000; 35% ≤ \$11,680; 48% ≤ \$16,266; 55% ≤ \$22,000; 60% over \$22,000. (Set 1978; minor indexation through 1981.) | Same 5 brackets (14.5–60%). Non-residents had no tax-free allowance (NZ had removed exemptions), so paid the same rates from first dollar. |
| 1982–1986 | 20% ≤ \$6,000; 31% ≤ \$24,000; 41% ≤ \$30,000; 51% ≤ \$38,000; 60% over \$38,000. +10% surtax on >\$24k brackets (effective top 66%). | Same brackets and base rates. No rebates for non-residents – paid full surtaxed rates (45.1%, 56.1%, 66% top). |
| Oct 1986 – 1987 | 17.5% ≤ \$6,000; 24% ≤ \$9,500; 31.5% ≤ \$25,000; 37.5% ≤ \$30,000; 52.05% ≤ \$38,000; 57% over \$38,000. (Top brackets cut; surtax removed.) | Same six brackets (17.5–57%). No special non-resident rates. |
| 1988–1989 | 24% ≤ \~\$30,000; 33% over \~\$30,000. (Transition in 1988: effectively two brackets by Oct 88.) Low-income rebate gave effective \~15% on first \~\$9.5k. | Statutory 24%/33% identical. Non-resident individuals not eligible for rebate – effectively taxed 24% from \$0. |
| 1990–Mar 1996 | 24% ≤ \$30,875; 33% over \$30,875. (No changes in this period.) | 24%/33% as for residents. Non-residents couldn’t claim low-income rebate, but rates were same. |
| Jul 1996 – Mar 1998 | 21.5% ≤ \$34,200; 33% over \$34,200 (from 1 Jul 1996); then 19.5% ≤ \$38,000; 33% over \$38,000 (from 1 Jul 1997). By Apr 1998: fully 19.5%/33%. | Same rates. During Jul 96–Mar 98 transitions, non-resident rates changed in step with resident rates. (No rebate by 1998, so treatment equal.) |
| Apr 1998 – 1999 | 19.5% ≤ \$38,000; 33% over \$38,000. (Two brackets; no rebate needed as 19.5% is base rate.) | 19.5%/33%, identical to residents. |
| 2000–Sep 2008 | 19.5% ≤ \$38,000; 33% ≤ \$60,000; 39% over \$60,000. (Top rate 39% added in 2000.) | Same 19.5/33/39 structure. Non-residents paid same marginal rates, but did not receive the low-income rebate that effectively lowered the 19.5% for residents. |
| Oct 2008 – Mar 2009 | 12.5% ≤ \$14,000; 21% ≤ \$40,000; 33% ≤ \$70,000; 39% over \$70,000. | Identical 12.5/21/33/39 scale. (No rebates; resident/non-resident same brackets.) |
| Apr 2009 – Sep 2010 | 12.5% ≤ \$14,000; 21% ≤ \$48,000; 33% ≤ \$70,000; 38% over \$70,000. (Top rate cut to 38%.) | Same 12.5/21/33/38 scale for non-residents. |
| Oct 2010 – 2020 | 10.5% ≤ \$14,000; 17.5% ≤ \$48,000; 30% ≤ \$70,000; 33% over \$70,000. (Rates cut in 2010; unchanged through 2020.) | Same four brackets (10.5/17.5/30/33) for non-residents. |
| Apr 2021 – 2025 | 10.5% ≤ \$14,000; 17.5% ≤ \$48,000; 30% ≤ \$70,000; 33% ≤ \$180,000; 39% over \$180,000. (New 39% top bracket from 2021.) | Same five brackets for non-residents (including 39% over \$180k). |
- B. Personal Tax Credits and Rebates:
| Credit | Years Active | Description | Amount / Phase-out | Notes |
|---|---|---|---|---|
| Low Income Earner Rebate | 1988–2008 (phased out by 2009) | Non-refundable rebate to offset tax on low wages after first-dollar taxation introduced. Not available to non-residents. | Initially max \$855/year at \$9,500 income (1988). Phased down in 1990s; by 2008 effectively \$0 (folded into 12.5% bracket). E.g. mid-2000s: max \~\$450, phased out by \~\$38k. | Replaced the prior tax-free threshold. Gave low earners an effective lower tax rate. Abolished in favor of explicit lower tax rates and IETC in 2008–09. |
| Independent Earner Tax Credit (IETC) | Apr 2009 – Present | Non-refundable credit for individuals without dependent children, to support low-to-middle income workers. Ineligible if receiving WFF, benefits, or NZ Super. | \$520 per year (\$10/week) for income \$24,000–\$44,000; abates at 13% for income \$44k–\$48k (zero credit ≥\$48k). (As of 2025, unchanged since introduction.) | Introduced with 2009 tax cuts to target relief to middle-income earners not benefitting from WFF. Still in effect (debate ongoing about its efficacy; relatively low uptake in some cases). |
| Family Tax Credit (Family Support) |
1986 – Present | Refundable credit for families with children (part of Working for Families package since 2004). Originally called “Family Support” (1986–2004). Provides base support per child, phased out at higher incomes. | Amount per child varies by age and number of children (e.g. in 2023, \~\$5,900 per year for first child under 16) – subject to change with budgets. Abatement \~\$0.25 per \$1 over threshold (threshold \~\$42,700 in 2023). | Introduced by Labour in 1986 tax reforms to replace universal family benefit with targeted support. Renamed Family Tax Credit in 2005. Adjusted occasionally for inflation and policy goals. |
| In-Work Tax Credit (IWTC) | Apr 2006 – Present | Work incentive credit for families with children, given only if parents work the required hours and do not receive income-tested benefits. Replaced the earlier Child Tax Credit (1996–2006). | \~\$3,770 per year for up to 3 children + \$780 for each additional child (2023 rates). Requires at least 20 hours/week (single parent) or 30 hours (couple) of work. Abated as part of WFF combined abatement (shared with Family Tax Credit above threshold). | Part of Working for Families from 2006. Encourages employment – only paid to working families. In 2020 the work-hours requirement was removed (temporarily during COVID), and permanently from 2021, extending it to all non-beneficiary families. |
| Minimum Family Tax Credit | 1986 – Present (from 1986–2004 called “Guaranteed Minimum Family Income”) | Ensures a minimum after-tax income for working families with children. If working but earning below a floor, a tax credit tops up income to that minimum. | Floor has changed over time (e.g. \$30,576 annual after-tax in 2023). Credit amount = difference between actual after-tax income and floor. Available only if at least one parent works full-time and not on a benefit. | Part of WFF; guarantees a baseline income for working families. Tied to changes in welfare and minimum wage – adjusted by government to “make work pay.” Not available to non-workers. |
| Parental Tax Credit (PTC) | Jul 1999 – June 2018 | Payment to families with a newborn, for the first weeks of baby’s life (on top of other WFF credits). Not paid if the family is on paid parental leave (introduced 2002) or income-tested benefit. | Initially \$150/week for 8 weeks; later \$220/week for 10 weeks (max \$2,200). Paid per newborn. Ended 2018, replaced by Best Start tax credit. | Encouraged parents to take time off work for newborns. Abolished in 2018 in favor of a universal Best Start credit for infants (administered by MSD as of 2018). |
| Best Start Tax Credit | July 2018 – Present | New credit replacing PTC, providing support for children in their early years. Universal for first year of a child’s life, and income-tested up to age 3. | \$3,120 per year (\$60/week) per child <1 (universal). For ages 1–2, same amount but abated with family income over \$79k (25% phase-out). (Figures as at 2023.) | Introduced as part of the Families Package 2018 (by Labour Government) to invest in early childhood wellbeing. Not part of original WFF but works alongside it. |
| Rebate for Charitable Donations | rebate since 1970s; tax credit since 2008 | Credit for donations to registered charities and public schools. Initially a rebate on tax, now a non-refundable tax credit equal to a portion of donations. | 1978–2007: capped rebate (e.g. \$500 max). Since 2008: 33⅓% of donations, up to total donation amount = taxable income (effectively uncapped). E.g. \$300 donation yields \$100 credit. | Technically not a “personal tax credit” for income support, but a longstanding feature. Encourages philanthropy. Available to resident taxpayers (individuals). |
- C. Levies and Other Deductions: (Primarily the ACC Earner’s levy; note NZ has no general social security tax.)
| Levy/Deduction | Years | Rate/Amount | Applicability | Notes |
|---|---|---|---|---|
| ACC Earner’s Levy (flat rate) | 1974–Present | 1974: Introduced at \~0.8% of earnings (est.) to fund new no-fault accident insurance scheme. 1990s: \~1.0% (varied; \~0.9–1.3%). 2000s: \~1.2–1.7% (e.g. 2005: 1.3%; 2010: 2.0%* then 1.7%). 2015–2020: 1.45% then 1.39%. 2021–2025: Increasing from 1.39% to \~1.83% by 2028 (approved rises). |
Charged on gross employment/self-employed earnings up to a yearly cap (e.g. \$136,544 in 2022). Paid by employees via PAYE withholding, and by self-employed via ACC invoicing. | Funds the ACC “Earners’ Account” for non-work injuries. Rate set annually based on injury claim costs. Not part of income tax per se, but collected alongside it. Levy is inclusive of GST in stated rate. (Employers pay a separate ACC levy for work injuries.) |
| Student Loan Repayment | 1992–Present | 1992: 10% of income above threshold (\~\$15k). Increased to 12% from 1 Apr 2013. Threshold e.g. \$21,268 in 2025. | New Zealand–resident borrowers with tertiary student loans. Deducted via PAYE (or invoiced by IR for self-employed). | Not a tax but functions as a mandatory deduction. NZ student loans charge 0% interest for residents (since 2006), so these deductions recoup principal. Treated separately from income tax in legislation. |
| KiwiSaver Contributions | July 2007–Present | Default employee contribution was 4% of gross pay (2007–2013), then 3% from 2013 onward (employees can choose 3%, 4%, 6%, 8%, or 10%). Employers must contribute 3% minimum (plus employer’s share of tax on that contribution). | Employees (automatically enrolled for new hires, with opt-out option). Contributions are deducted from pay after PAYE tax. (Employers’ 3% is on top of salary, taxed via “Employer Superannuation Contribution Tax”). | KiwiSaver is a voluntary retirement savings scheme, not a tax. However, contributions are payroll-deducted similar to a levy. The government incentivizes KiwiSaver with an annual tax credit (up to \$521 matching) for members – effectively a government subsidy, not related to income tax brackets. |
| Superannuation Surcharge | 1985–1998 | 20% then 25% tax on “excess” retirement income (NZ Super pension plus other income) over a small exempt amount. E.g. in 1990s, abated 25c per \$1 of other income beyond \~\$100/week, effectively taxing higher-income pensioners’ NZS. | Applied to recipients of NZ Superannuation (universal pension) whose total income exceeded specified thresholds. | Not part of PAYE, but an additional income tax on the elderly with substantial other income. Very unpopular; abolished in 1998. (Since then, NZ Super is paid without income test, and superannuitants are taxed under normal brackets only.) |
| Social Security (Employment) Levy | 1970 (historical) | 1970 only: a temporary 3⅓% surcharge on all personal income tax rates (Dec 1970–Jul 1971) to counter budget shortfall. (Effectively a one-time levy.) | All individual taxpayers (resident and non-resident) during the period. Collected via withholding and assessment as part of income tax. | Enacted by Muldoon in 1970 Mini-Budget – sometimes described as a “surcharge” on tax rather than a separate levy. Allowed government to raise additional revenue across the board for part of the year. Not repeated thereafter; future governments preferred explicit rate changes or base broadening. |
[]* In 2010, ACC levy briefly spiked (to \$2.00 per \$100 earnings for part of the year) before dropping – reflecting ACC funding needs.