NZ Bonus Tax Calculator
Calculate the tax on your bonus or extra pay for the 2025-26 or 2024-25 tax year. See your net bonus after PAYE, ACC, KiwiSaver, and student loan deductions.
Key Takeaway
There is no special “bonus tax” in New Zealand. Bonuses are taxed at your marginal PAYE rate and are also subject to ACC earner’s levy, KiwiSaver contributions, and student loan repayments if applicable.
Key Facts — 2025-26
Bonus Tax Rate
Marginal rate
ACC Earner’s Levy
1.67%
ACC Cap
$152,790
Student Loan Rate
12%
How Bonus Tax Works in New Zealand
In New Zealand, bonuses are treated as “extra pay” by Inland Revenue (IRD). There is no special bonus tax rate — instead, your employer “grosses up” the bonus by adding it to your annualised regular income, finds the single tax bracket that grossed-up total falls into, and applies that one flat rate to the entire bonus.
Unlike your regular salary, the bonus itself is not split across brackets — even if adding it to your salary pushes your total income past a threshold, the whole bonus is taxed at the single rate for the bracket the grossed-up total lands in. This can make the withholding on a bonus slightly over- or under-shoot your true annual tax liability; IRD’s automatic income tax assessment after 31 March reconciles the difference.
ACC earner’s levy also applies to bonus payments. The levy is 1.67% on all earnings up to the annual cap of $152,790 for 2025-26 (maximum levy $2,551.59). If your salary already exceeds the cap, no additional ACC levy is charged on your bonus. If your salary is below the cap but salary plus bonus exceeds it, the levy only applies to the portion of the bonus below the cap.
KiwiSaver contributions apply to bonus payments at your chosen employee rate (3%, 4%, 6%, 8%, or 10%). Your employer also contributes a minimum of 3% on the bonus. KiwiSaver deductions are made before you receive your net bonus, just as they are on regular pay.
If you have a student loan, repayments at 12% apply to income above the $24,128 annual threshold. A bonus that increases your total income will increase your student loan repayments accordingly. If too much is deducted during the year, IRD will adjust this in your end-of-year income tax assessment.
NZ Income Tax Brackets — 2025-26
Your bonus is taxed at the marginal rate determined by your total income (salary + bonus). New Zealand has no personal allowance — tax applies from the first dollar.
| Income Range | Rate | Tax on Band |
|---|---|---|
| $0 – $15,600 | 10.5% | $1,638 |
| $15,601 – $53,500 | 17.5% | $6,632.50 |
| $53,501 – $78,100 | 30% | $7,380 |
| $78,101 – $180,000 | 33% | $33,627 |
| Over $180,000 | 39% | — |
Worked Example
Scenario: You earn $70,000 per year and receive an $8,000 bonus. You contribute 4% to KiwiSaver and have no student loan. How much of the bonus do you take home?
Step 1 — Gross up: Add the bonus to your annual salary: $70,000 + $8,000 = $78,000.
Step 2 — Find the bracket: $78,000 falls in the $53,501–$78,100 band, so the flat rate for this bonus is 30%.
Step 3 — PAYE on the bonus: IRD applies that one flat rate to the whole bonus — it is not split across brackets: $8,000 × 30% = $2,400.
Step 4 — ACC earner’s levy: Your total earnings ($78,000) are below the $152,790 cap, so the full bonus is subject to ACC levy: $8,000 × 1.67% = $133.60.
Step 5 — KiwiSaver: At 4%, your employee contribution on the bonus is: $8,000 × 4% = $320.
Total deductions on bonus: $2,400 + $133.60 + $320 = $2,853.60.
Net bonus: $8,000 − $2,853.60 = $5,146.40.
Your effective deduction rate on the bonus is 35.7%.
Frequently asked questions
How are bonuses taxed in New Zealand?
IRD treats bonuses as 'extra pay'. Your employer 'grosses up' the bonus by adding it to your annualised regular income, finds the single tax bracket that grossed-up total falls into, and applies that one flat rate to the WHOLE bonus — it is not split across brackets even if the bonus itself straddles a threshold.
Is there a special bonus tax rate in NZ?
No. New Zealand does not have a separate 'bonus tax' rate. Bonuses are taxed under IRD's 'extra pay' rules at a single flat rate, chosen by which tax bracket your total annualised income (salary + bonus) falls into. The whole bonus is taxed at that one rate — unlike your salary, the bonus itself is not split across multiple brackets. This can occasionally over- or under-withhold slightly versus your true annual liability; IRD's automatic assessment after 31 March reconciles the difference.
Do I pay ACC earner's levy on my bonus?
Yes, if your total earnings (salary plus bonus) are below the ACC earner's levy cap of $152,790 for 2025-26. The levy is 1.67% on earnings up to the cap. If your salary already exceeds the cap, no additional ACC levy applies to your bonus.
Do I pay KiwiSaver on my bonus?
Yes. If you are enrolled in KiwiSaver, your employee contribution rate (3%, 4%, 6%, 8%, or 10%) applies to bonus payments as well as regular salary. Your employer also contributes a minimum of 3% on the bonus amount. You cannot opt out of KiwiSaver contributions on individual bonus payments.
Does student loan repayment apply to bonuses?
Yes. If you have a student loan, the repayment rate of 12% applies to income above the $24,128 annual threshold. Since bonuses increase your total income, they can increase your student loan repayment for the year. The repayment is calculated on your combined salary and bonus income.
Will I get a tax refund at the end of the year?
You may receive a refund if too much PAYE was deducted from your bonus during the year. IRD performs an automatic income tax assessment after 31 March each year. If the extra pay PAYE method resulted in over-deduction, you will receive a refund. You can also check your assessment in myIR.
How does the extra pay PAYE method work?
When your employer pays a bonus, they use IRD's 'extra pay' method: add the bonus to your annualised regular income to get a 'grossed-up' total, find which tax bracket that total falls into, and apply that single flat rate to the entire bonus. The bonus itself is not split across brackets, even if it straddles a threshold. Source: IRD, Calculate PAYE for a lump sum payment.
Can I put my entire bonus into KiwiSaver?
Your standard KiwiSaver employee contribution rate applies automatically to your bonus. If you want to contribute more, you can make voluntary contributions directly to your KiwiSaver provider after receiving the bonus. However, you cannot instruct your employer to deduct more than your chosen rate (3%, 4%, 6%, 8%, or 10%) from payroll.
Sources
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Last updated March 2026. Reflects 2025-26 tax year rates.
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