Individual income tax rates in NZ – $50k intervals to $500k
For the purposes of:
- Facilitating discussion around what a fair tax system looks like
- To provide a far greater income range, and different insights, beyond the graph above
- To illustrate the multiple approach used for designing tax systems
| Income | Income tax | Tax/income | Income vs $50k | Tax vs $50k |
|---|---|---|---|---|
| $50,000 | $8,020 | 16% | x 1 | x 1 |
| $100,000 | $23,920 | 24% | x 2 | x 3 |
| $150,000 | $40,420 | 27% | x 3 | x 5 |
| $200,000 | $58,120 | 29% | x 4 | x 7.2 |
| $250,000 | $77,620 | 31% | x 5 | x 9.7 |
| $300,000 | $97,120 | 32% | x 6 | x 12.1 |
| $350,000 | $116,620 | 33% | x 7 | x 14.5 |
| $400,000 | $136,120 | 34% | x 8 | x 17 |
| $450,000 | $155,620 | 35% | x 9 | x 19.4 |
| $500,000 | $175,120 | 35% | x 10 | x 21.8 |
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Are New Zealand’s individual income tax rates fair?
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Have your say
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Other notes:
- We stopped the graph at $200,000 because:
- Only 1.5% of New Zealanders earn above $200,000. See https://www.ird.govt.nz/-/media/project/ir/home/documents/files/statistics/income-distributions-of-individual-customers-2001-to-2019/thousand-dollar-bands-01-20–pop-only-from-15-16-onwards.xlsx?modified=20220202001304&modified=20220202001304
- It was hard to read with more columns added
- $50,000 is a good benchmark figure as it is very close to the median income for an FTE worker in New Zealand. In the June 2021 quarter, median income for FTEs was $27.76/hour or $1,093/week. See https://www.stats.govt.nz/information-releases/labour-market-statistics-income-june-2021-quarter#:~:text=Median%20weekly%20earnings%20from%20wages,%2460%20(5.1%20percent)%20to%20%241%2C247. The September and December quarter releases did not have median income data.
- For simplicity, we did not include the following taxes:
- ACC levies that help fund the nation’s health system
- 15% GST paid on consumer purchases
- We also omitted voluntary Kiwisaver contributions as they are not a tax
- For simplicity, we did not include the following tax credits:
- IETC (Independent Earner Tax Credit)
- Working for Families
- All numbers are provisional and subject to revision.
Thank you to the Factors who helped pull this together.
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SOURCES:
Tax rates for individuals https://www.ird.govt.nz/income-tax/income-tax-for-individuals/tax-codes-and-tax-rates-for-individuals/tax-rates-for-individuals
This work is based on/includes Stats NZ’s data which are licensed by Stats NZ for reuse under the Creative Commons Attribution 4.0 International licence.
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