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Taxes in New Zealand: Which should I pay?
Here’s an overview of New Zealand taxes, including tax rates and the most important taxes for individuals and businesses.
We share the rates, requirements, and key aspects of taxes in New Zealand for 2025. Its tax system is progressive and taxes individuals and businesses differently. For example, for individuals, the income tax rates range from 10.5% to 39%. If you’d like to learn more about these brackets, keep reading.
The New Zealand tax system plays a crucial role in funding public services and investing in infrastructure, positively impacting the quality of life for its residents and visitors.
Taxes for Individuals in New Zealand
Income tax
New Zealand applies a progressive income tax system. Starting from 1st April 2025, the rates will be as follows:
- $0–9,100 (€8,400.00): 10.5%
- $9,101–31,200 (€8,400.00–28,800.00): 17.5%
- $31,201–45,500 (€28,800.00–42,000.00): 30%
- $45,501–104,800 (€42,000.00–96,800.00): 33%
- Over $104,800 (€96,800.00): 39%
Example: If someone earns $34,900 (€32,300.00) annually, they will pay:
- 10.5% on the first $9,100 (€8,400.00) = $950 (€880.00)
- 17.5% on the next $22,200 (€20,300.00) = $3,880 (€3,550.00)
- 30% on the last $3,780 (€3,500.00) = $1,130 (€1,050.00)
- Total annual tax: $5,960 (€5,480.00)
Goods and Services Tax (GST)
The GST is a 15% tax applied to most goods and services in New Zealand. Businesses must register for GST if their annual turnover exceeds $34,900 (€32,300.00). Some financial services and exports are exempt or have a 0% rate.
Fringe Benefit Tax (FBT)
The FBT applies to non-monetary benefits provided by employers, such as company cars or health insurance. The standard rate is 49.25%, but it can vary depending on the type of benefit and the employee’s situation.
Capital Gains Tax
New Zealand does not have a general capital gains tax. However, gains from the sale of properties within certain periods may be considered income and subject to tax, for example:
Sale of Property within the “Bright-line” Period
New Zealand applies a “bright-line rule” that treats certain gains from the sale of residential properties as taxable income, depending on how long the property has been held.
How does it work?
- If you buy a residential property and sell it within 10 years, the profit you make could be considered taxable income and subject to tax.
- Exceptions: Your main residence, inherited properties, and properties built as part of a development project may be exempt.
Example:
- You buy a house in Auckland in January 2020 for $406,000 (€375,000.00).
- You sell it in April 2025 for $522,000 (€482,000.00).
- Profit: $116,000 (€107,000.00).
- Since you sold it within the 10-year period, and it’s not your main home, this profit is considered taxable income and will be added to your personal income to calculate the corresponding tax based on your marginal rate (e.g., 33%).
Deductions and Tax Credits
Residents may be eligible for tax credits such as the “Working for Families” credit, which supports families with low or middle incomes. Additionally, contributions to retirement savings plans like KiwiSaver may offer tax benefits, such as:
1. Employer Contributions: Mandatory and Tax-Free
- Employers are required to contribute at least 3% of the employee’s gross salary to their KiwiSaver account.
- These contributions are not subject to additional taxes for the employee, as they are pre-tax contributions (though the employer pays a specific tax called ESCT).
2. Government Contribution
- For every dollar the member contributes, the government contributes 50 cents, up to a maximum of $300 (€277.00) per fiscal year.
- To receive the full contribution, at least $600 (€555.00) must be contributed annually (approx. $11.50 (€10.50) per week).
- This money is not considered taxable income, making it a direct net incentive from the government.
Taxes for Businesses in New Zealand
Corporate Income Tax (CIT)
Companies in New Zealand are subject to a 28% corporate income tax on their global income. Non-resident companies only pay taxes on income generated within the country.
Example: A company with a net profit of $290,000 (€268,000.00) will pay $81,200 (€75,000.00) in corporate taxes.
Fringe Benefit Tax (FBT)
The FBT applies to non-monetary benefits provided to employees, such as company cars or health insurance. Rates vary depending on the type of benefit and calculation frequency, with a maximum rate of 63.93%.
Employer Superannuation Contribution Tax (ESCT)
Companies must deduct ESCT from cash contributions made to employees’ retirement accounts. Rates vary from 10.5% to 39.0%, depending on the employee’s income and seniority in the company.
Accident Compensation Corporation (ACC) Levies
Employers pay a levy of 1.67% on wages to fund New Zealand’s accident insurance scheme. This levy applies to an annual income up to $88,800 (€82,000.00). Additionally, an industry-specific labour levy applies.
Goods and Services Tax (GST)
The GST is a 15% tax applied to most goods and services. Businesses must register for GST if their annual turnover exceeds $34,900 (€32,300.00).
How to Pay Taxes Online in New Zealand
Paying taxes online in New Zealand is a simple and secure process. Businesses can use the following options:
1. Online Banking
Most New Zealand banks offer a “tax payment” function through their online banking platforms. When making a payment, be sure to include your IRD number as a reference.
2. myIR Portal
The myIR portal allows payments using Visa and Mastercard credit or debit cards. To do so, log into your myIR account, select the payment option, and follow the instructions provided.
3. Payments from Overseas
If you’re outside of New Zealand, you can make payments via international transfers or use credit or debit cards through the myIR portal. Be sure to check with your bank for any associated fees.
Stay Connected in New Zealand with Holafly
If you’re a frequent traveller and want to stay connected while paying your taxes online from abroad, Holafly’s monthly plans are the ideal solution. With coverage in New Zealand and over 160 countries, Holafly guarantees a stable and secure connection wherever you are. Plus, you can connect multiple devices at once with the unlimited plan or the 25 GB plan, month by month and with no commitments.
Important: If you are a frequent traveler and want to stay connected without worrying about expensive roaming or looking for a new SIM at every destination, Holafly’s subscription plans are for you. With a single eSIM, enjoy internet in more than 160 countries for a fixed price and no surprises on your bill. Travel without limits and connect easily and securely! 🚀🌍
We also have another solution for short stays, the New Zealand eSIM from Holafly, offering unlimited data that you can purchase only for the days you need.
Tax Benefits in New Zealand
New Zealand offers various tax incentives to attract foreign investment, encourage innovation, and facilitate migrant integration into the tax system. Here are some of the main tax benefits for 2025:
1. Investment Boost: 20% Deduction on Productive Assets
From 22nd May 2025, businesses can immediately deduct 20% of the value of new productive assets, such as machinery and tools, in the fiscal year of acquisition. This deduction is in addition to standard depreciation and is available to all types of businesses, including companies, sole traders, and trusts.
2. Incentives for Migrants and Returnees
From 1st April 2025, migrants who become full tax residents in New Zealand can opt for a new calculation method for foreign investment funds (FIF). Under this method, only 70% of the capital gains made after acquiring tax residency are taxed, and the taxpayer’s marginal rate applies.
3. Support for Startups and Emerging Companies
The 2025 budget allocates 10 million to allow startups and unlisted companies to defer tax obligations related to employee share schemes. This measure aims to encourage talent retention and foster the growth of new businesses.
4. Tax Rebates for International Film Productions
New Zealand has strengthened its rebate scheme for international film productions, offering a cash rebate of 20% on production costs that exceed $8,700,000 (€8,000,000) for movies and $2,320,000 (€2,130,000) for TV programmes. This initiative aims to attract foreign investment and promote the local audiovisual industry.
Frequently Asked Questions about Taxes in New Zealand
The rates are progressive: 10.5% for income up to $9,100 (€8,400), 17.5% up to $31,200 (€28,800), 30% up to $45,500 (€42,000), 33% up to $104,800 (€96,800), and 39% for income above this amount.
The IRD number is a tax identifier required for carrying out tax activities in New Zealand. It can be requested online through the Inland Revenue website.
Yes, non-resident businesses are taxed on income generated within the country. The standard corporate tax rate is 28%.
New Zealand has agreements with several countries to avoid double taxation and prevent tax evasion. These agreements allow for tax credits on taxes paid abroad.
GST is a 15% tax on goods and services. Businesses with annual revenue over $34,900 (€32,300) must register and submit periodic returns.
In addition to the Investment Boost, startups can benefit from the option to defer taxes related to employee share schemes, helping to grow and retain talent.
Yes, migrants can opt for tax calculation methods that reduce the tax burden on foreign investments, especially during the first years of tax residency.
