Changes in Marginal Tax Thresholds
For the first time since 2010, personal tax rate thresholds will change from 31 July 2024. The change was announced as part of the 2024 budget. When personal tax thresholds are not regularly adjusted to take into account inflation or wage growth, individuals end up paying a higher percentage of their income in taxes over time. As such, adjusting these thresholds arguably reverses past tax increases.
The new personal tax rates for individuals are:
| Current brackets | New brackets | Rate |
| $0 - $14,000 | $0 - $15,600 | 10.5% |
| $14,001 - $48,000 | $15,601 - $53,500 | 17.5% |
| $48,001 - $70,000 | $53,501 - $78,100 | 30% |
| $70,001 - $180,000 | $78,101 - $180,000 | 33% |
| $180,001 + | No change | 39% |
Employers will be responsible for handling these pay adjustments on behalf of employees from 31 July 2024 in pay cycles going forward. Payroll software users should receive updates from providers (if they haven’t already) once the new thresholds are ready. For those managing payroll manually or without software, it's essential to use updated tax tables for precise calculations.
Most NZ individuals have a balance date of 31 March. As the changes are effective part-way through the 31 March 2025 year, if an employer’s payroll system hasn’t been updated by 31 July 2024, any owed amounts should be included in subsequent payments or settled during an end-of-year reconciliation.
