This update applies the new tax specifications for pays falling in the July 31st 2024 - March 31st 2025 tax period, as detailed below.
Tax Bracket Changes
The tax brackets for calculating both standard PAYE and Lump Sum Tax thresholds have been updated as follows:
| Current threshold | New threshold 31 July 2024 | Tax 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 upwards | $180,001 upwards, no change | 39% |
Note that per IRD specifications, Lump Sum Tax calculations will continue to use the 1 Apr 2024 - 30 Jul 2024 thresholds until 1 Apr 2025.
Independent Earner Tax Credit Changes
The tax brackets for the independent earner tax credit (applicable to employees on tax codes ME or ME SL) have been updated as follows:
| Current threshold | New threshold 31 July 2024 | Your entitlement |
|---|---|---|
| $24,000-$44,000 | $24,000-$66,000 | $10 a week or $520 a year |
| $44,001-$48,000 | $66,001-$70,000 | The payment reduces by 0.13 cents for every dollar you earn |
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