NEW TAX RATES IN NZ

New tax rates in NZ: What will they mean for you? Less dollars in your pocket, basically. A new personal tax rate was introduced from 1 April 2021: 39% on personal income exceeding $180,000 per year; additionally, the government have increased the trustee tax rate from 33% to 39% from 1 April 2024.

• This applies to individuals only, e.g. an individual receiving a salary of $200,000 will pay an additional $1,200 tax each year
• It does not apply to combined household income, e.g. if you earn $100,000 each as a couple, you won’t pay any more tax in NZ
• All other rates and brackets unchanged at this stage, although the government has advised it plans to implement changes (reductions) to personal tax rates in future.
• It is applied progressively i.e. it is not a blanket rate on all your income. Income under 180k is charged at lesser rates that scale up from 10.5% to 33%
• No changes were made in 2021 to trust (33%) or company (28%) tax rates back in 2021, but from 1 April 2024 the trustee tax rate will align with the top personal tax rate: 39%

Further Changes Coming

The government has signaled that personal tax rates will be adjusted for inflation. This will give everyone more more in their pocket. The new personal income tax rates that will apply are:

• 10.5% up to NZ$15,600
• 17.5% on NZ $15,601 to NZ$53,500
• 30% on NZ$53,501 to N $78,100
• 33% on NZ$78,101 to NZ$180,000
• 39% on NZ$180,001+ (unchanged)

The Importance of Structures

These changes emphasize how important it is to have the right business and/or investment structures in place. There will be tax planning opportunities arising out of the difference between the new trust tax rate (39%), the company tax rate (28%), and the current top personal tax rate (39%). 

If you would like a review of your tax position and structure, please complete the contact form below or call us on 099730706 line 2