New Zealand has a relatively simple tax system compared to many countries. Here's what you need to know about paying tax as a newcomer.
Getting an IRD Number
An IRD number is your personal tax identification number with Inland Revenue (IRD). You need one to work, get paid, open an interest-bearing bank account, or receive government support.
- Apply online at ird.govt.nz (the myIR system).
- You'll need your passport and your visa details.
- Processing takes 2–10 working days. You can start work without it — your employer will use a higher tax rate (13.5% or specified) until you provide it.
How PAYE Works (Pay As You Earn)
If you're an employee, tax is deducted automatically from your pay. Your employer calculates the tax based on your tax code and pays it directly to Inland Revenue. You don't need to file a tax return unless you have additional income.
Tax Codes
The most common tax codes for newcomers:
- M: Main job, no student loan (use this for your primary employment)
- ME: Main job, with an exemption — same as M but $52 tax credit claimed through your employer
- SB: Secondary job (you already have a main job)
- S: Secondary job, no student loan
- ST: Secondary job — use this if your secondary income will be over $14,000/year
- CAE: Casual agricultural or election work
- WT: Withholding tax — used by contractors who haven't provided an IRD number
If you're a contractor or freelancer, you pay tax through provisional tax (paying in instalments) and file an annual tax return (IR3).
Tax Rates (2025–2026)
| Income Bracket | Tax Rate |
|---|---|
| Up to $14,000 | 10.5% |
| $14,001 to $48,000 | 17.5% |
| $48,001 to $70,000 | 30% |
| $70,001 to $180,000 | 33% |
| $180,001 and over | 39% |
New Zealand has no capital gains tax (except for certain investment properties), no inheritance tax, and no stamp duty on property transfers.
Transitional Tax Provisions for Newcomers
- Your tax residency starts when you have a "permanent place of abode" in NZ or when you've been in NZ for 183+ days in any 12-month period.
- For the first 4 years of tax residency, most foreign income (e.g., overseas pensions, rental income from overseas property) is exempt from NZ tax under the "transitional residency" rules.
- Overseas superannuation (pension) transfers to NZ are generally not taxed if transferred within 4 years of becoming a NZ tax resident.
- If you keep assets overseas and sell them after becoming a NZ tax resident, you may need to pay tax on the gain. Get professional advice.
Filing a Tax Return
Most employees don't need to file a tax return — Inland Revenue automatically assesses your tax position at the end of each tax year (1 April to 31 March) and will notify you if you're owed a refund or owe extra tax.
You should file a return (IR3) if you:
- Are self-employed or a sole trader
- Rent out property
- Have overseas income not already taxed
- Want to claim deductions or expenses
- Have been told to file by Inland Revenue
KiwiSaver
KiwiSaver is a voluntary retirement savings scheme. As an employee:
- You choose your contribution rate: 3%, 4%, 6%, 8%, or 10% of your gross pay
- Your employer contributes 3% (mandatory minimum)
- The government contributes up to $521 per year (as of 2025) if you're between 18–64
- You can access your KiwiSaver funds when you turn 65, buy your first home, or under certain hardship or serious illness conditions
- You can choose your KiwiSaver provider and fund type (conservative, balanced, growth)
Tax Help and Resources
- Inland Revenue website — all official forms and information
- myIR — online portal for managing your tax and KiwiSaver
- 0800 775 247 — Inland Revenue contact centre
- Citizens Advice Bureau — free advice (local branches)
- Consider hiring a tax agent or accountant for your first tax return
2026 Numbers to Know
Three numbers anchor newcomer tax planning in 2026. First, the tax rates: 10.5% up to NZ$15,600, 17.5% to $53,500, 30% to $78,100, 33% to $180,000, and 39% above that — so a $90,000 salary pays roughly 26–28% effective tax before ACC levies. Second, the transitional residency rules: if you become a tax resident, most overseas income (salary, interest, dividends) is generally exempt from NZ tax for the first four years of your transitional residency period — a huge planning lever for anyone moving with investments, but it requires filing a declaration with IRD, and the rules have sharp edges (NZ-sourced income is always taxed). Third, KiwiSaver: your employer contributes at least 3% of your salary, and you choose your own rate (3/4/6/8/10%) — joining early means free money you cannot get back for missed years. Get your IRD number before your first pay day, use the correct tax code (M for a single main job), and remember PAYE means most people never file a return at all — the system settles itself each year.
The 2026/27 PAYE Brackets
New Zealand has no tax-free threshold — tax applies from the first dollar of income — and the rates are progressive:
| Taxable income | Rate |
|---|---|
| $0 – $15,600 | 10.5% |
| $15,601 – $53,500 | 17.5% |
| $53,501 – $78,100 | 30% |
| $78,101 – $180,000 | 33% |
| Over $180,000 | 39% |
Two things sit on top and are easy to miss when comparing a New Zealand salary with one back home. The ACC earners' levy of 1.75% is bundled into the PAYE deduction on your first $156,641 of earnings — costing $1,225 a year on a $70,000 salary. And if you have a student loan, repayments are collected through PAYE as well. There is also an independent earner tax credit worth up to $520 that some middle-income earners qualify for, so it is worth checking an online PAYE calculator against your first full payslip.
The Four-Year Exemption for New Migrants
New Zealand's transitional tax residency rules are unusually generous, and for anyone with investments or rental property overseas they are worth more than almost any other settlement benefit:
- A new migrant — or a New Zealander returning after at least ten years away — can qualify as a transitional resident.
- For roughly four years (about 48 months) after becoming a New Zealand tax resident, most foreign-source income is exempt from New Zealand tax: foreign dividends, interest, rental income and salary earned offshore.
- You qualify automatically if you are eligible — you do not need to apply — and the exemption can only be used once.
- It generally requires that you were not a New Zealand tax resident in the ten years before you became one.
Other Taxes the Exemption Does Not Cover
Transitional residency covers foreign income, not the New Zealand system. NZ-sourced income is fully taxable from day one, GST is 15% on most goods and services, and there is no stamp duty or general capital gains tax — though the brightline test taxes gains on property sold within two years (for property acquired from 1 July 2024). Rates are set by local councils and are separate from income tax.