NZ Budget 2026
Budget night dashboard. Eleven tax and benefit measures we're watching for the Thursday 28 May 2026 announcement, plus locked 2026-27 changes that take effect 1 April regardless. Post-Budget this page fills in confirmed figures live — calculators follow within 2-3 hours.
Budget 2026 delivered Thursday 28 May 2026 at 2:00 pm NZST
Four substantive personal-finance changes confirmed: temporary $50/wk IWTC boost, FTC + Best Start CPI uplift, KiwiSaver 3.5% from 1 April 2026 with Stage 2 deferred to 1 April 2028, $100k donation tax credit cap, and NFP threshold $1k → $10k. PAYE / IETC / student loan / ACC / BrightLine / FIF / GST all unchanged. Read the full Budget 2026 summary or jump into the deep-dive cluster below.
Personalise your number
What's Budget 2026 worth to you?
The Net Impact Calculator combines IWTC boost + FTC/Best Start CPI uplift + KiwiSaver employer match + donation cap into one annual figure with a per-change breakdown — under 30 seconds with your salary, family situation, and KiwiSaver status.
Budget 2026 deep dives
One article per substantive change, plus the macro framing. Each has a calculator link so you can model the dollar impact at your numbers.
Overview
Budget 2026 summary
Four changes, what stayed the same, plain-English walkthrough with worked examples.
Working families
IWTC $50/wk boost
$97.50 → $147.50/wk temporarily. 143,000 families full boost, 14,000 newly eligible. Petrol-price trigger and expiry.
Retirement
KiwiSaver: 3.5%, Stage 2 to 2028, 16-17yo eligibility
Three concrete changes, MTC stays at $260.72, what employers and employees need to do.
Philanthropy
Donation $100k cap
Max annual donation tax credit becomes $33,333. Couple-splitting, family-foundation routing, bequest planning.
Clubs & societies
NFP $10,000 threshold
$1,000 → $10,000 net income tax-free for not-for-profits. ~3,000 small clubs no longer file IR9.
Income tax
PAYE freeze + fiscal drag
Why brackets stayed put, what bracket creep is costing you, why Treasury rejected even a $5/wk IETC lift.
Budget 2026 in context — what the big themes mean for you
The headlines will be macro — a ~$2.4b operating allowance, a ~$2.4b public-sector savings drive, and no broad tax cuts as Treasury's surplus target slips to 2028/29. Here's how each lands on a household budget, with the tool to check your number.
Public-sector savings drive
~8,700 fewer public-sector roles, mostly via attrition. If you're made redundant, severance is taxed as income and you may qualify for Jobseeker Support.
No tax cuts → fiscal drag
With PAYE thresholds frozen, a pay rise that just tracks inflation still pushes more income into higher brackets — bracket creep lifts your real tax rate.
Cost-of-living cushions
A tight allowance means existing supports do the work, not new relief. Make sure you're claiming what you're already entitled to.
The road back to surplus
A weaker global outlook has slipped the surplus to 2028/29, so the Government is prioritising debt control over spending. For households that means status-quo tax settings — run your 2026-27 baseline now.
Watch list — 11 measures
Income tax
PAYE thresholds
No changeCurrent: $15,600 / $53,500 / $78,100 / $180,000 (10.5/17.5/30/33/39%)
What to watch: Likely unchanged (Budget 2024 cuts already legislated). Watch for indexation announcement.
Confirmed: Frozen at 2025-26 levels. No indexation announcement. Fiscal drag (bracket creep) continues.
IETC abatement thresholds
No changeCurrent: Abatement starts $48,000, ends $66,667; 13c per $
What to watch: Possible adjustment to abatement floor.
Confirmed: IETC retained at $10/week for $24,000-$70,000 earners. A $5/week lift was explicitly rejected by Treasury as costing $230M-$560M with delayed payroll-system delivery (3+ months), and 75% of recipients receive at year-end anyway.
KiwiSaver
Employer minimum match
ConfirmedCurrent: 3% (2025-26) → 3.5% (2026-27 legislated)
What to watch: Confirm the legislated 3.5% step still applies; watch for further lift.
Confirmed: 3.5% from 1 April 2026 (legislated, Budget 2026 confirms timeline). Stage 2 lift to 4% now scheduled 1 April 2028 (previously expected sooner). ALSO NEW: 16- and 17-year-olds now eligible for compulsory employer contributions from 1 April 2026.
Default employee contribution rate
ConfirmedCurrent: 3% (2025-26) → 4% (2026-27 legislated)
What to watch: Confirm the auto-step to 4% still applies for new enrolments.
Confirmed: Default employee rate 3.5% from 1 April 2026. Stage 2 to 4% deferred to 1 April 2028 (not 2026-27 as earlier expected). Schools receive funding to cover the increased employer contributions.
Government member contribution
No changeCurrent: $260.72 / year (halved from $521.43 in Budget 2025)
What to watch: Restoration would cost money, so unlikely in a tight savings Budget — but the most-watched item; could move either way.
Confirmed: $260.72/year retained. No restoration toward the pre-2025 $521.43.
Working for Families
FTC / IWTC / Best Start weekly amounts
ConfirmedCurrent: FTC $144 first / $117 subsequent, IWTC $97.50 base, Best Start $73/wk
What to watch: Possible CPI uplift in 2026-27 dollar amounts (abatement threshold + rate are already locked separately for 2026-27 — see locked section).
Confirmed: FTC eldest $7,524 → $7,921/yr ($144.70 → $152.30/wk). FTC subsequent $6,130 → $6,454/yr ($117.90 → $124.10/wk). Best Start $3,838 → $4,041/yr ($73.80 → $77.70/wk). PLUS a TEMPORARY $50/wk IWTC base lift to $147.50/wk for 2026-27 ONLY (reverts to $97.50 from 1 April 2027 or earlier if 91-octane petrol drops below $3/L for 4 consecutive weeks). ~143k families receive full $50; ~14k newly eligible at abated amounts.
TEMPORARY $50/wk IWTC boost (NEW)
ConfirmedCurrent: IWTC base $97.50/wk = $5,070/yr
What to watch: Not on pre-Budget watch list.
Confirmed: TEMPORARY boost to $147.50/wk ($7,670/yr) for 2026-27 ONLY (1 April 2026 - 31 March 2027). Cost $373M. Targets ~143k low-to-middle-income working families plus ~14k newly eligible. Reverts to $97.50 from 1 April 2027 or earlier if 91-octane petrol < $3/L for 4 consecutive weeks. Legislated via Taxation (Annual Rates for 2025-26, Compliance Simplification, and Remedial Measures) Act 2026.
Charitable giving
Donation tax credit $100k annual cap (NEW)
ConfirmedCurrent: No dollar cap (limited only by taxable income, 33.33% credit rate)
What to watch: Not on pre-Budget watch list.
Confirmed: Eligible donations for the donation tax credit are now capped at $100,000/year from 1 April 2026. Credit rate stays at 33.33%. Cap binds only on very high-income donors — most filers unaffected. Reduces the abuse opportunity highlighted by IRD in pre-Budget consultation.
Not-for-profit
NFP tax-free income threshold (NEW)
ConfirmedCurrent: $1,000 of net income before tax obligation
What to watch: Not on pre-Budget watch list.
Confirmed: Threshold lifted from $1,000 to $10,000/year of net income before a not-for-profit must pay tax. Membership subscriptions and levies received by NFPs remain non-taxable. Effective from the start of NFP tax years beginning 1 April 2026.
Student loan
Repayment threshold (NZ-based)
No changeCurrent: $24,128 / year (12% on income above)
What to watch: Historically flat; could be CPI-indexed.
Confirmed: $24,128 threshold and 12% repayment rate retained. No indexation announced.
ACC
ACC earner levy
No changeCurrent: 2026-27: 1.75% on earnings up to $156,641 (max $2,741.22)
What to watch: ACC sets levies on a separate cycle but Budget Estimates reference. Confirm cap.
Confirmed: ACC earner levy 1.75% / $156,641 cap retained. ACC operates on a separate annual cycle; Budget 2026 did not amend.
Property
BrightLine test period
No changeCurrent: 2 years (reverted from 10 yrs on 1 Jul 2024)
What to watch: Likely unchanged. Watch for any political signal of restoration.
Confirmed: 2-year BrightLine retained. No restoration to longer holding periods.
Investment
FIF $50,000 de-minimis threshold
No changeCurrent: $50,000 (cost basis, foreign shares)
What to watch: Possible lift to broaden simplified-investor exemption.
Confirmed: $50,000 FIF de-minimis retained. FDR / CV / Comparative Value methodology unchanged.
GST
GST rate
No changeCurrent: 15%
What to watch: Untouched since 2010. Very unlikely to move.
Confirmed: GST 15% retained — untouched since 2010.
Already locked for 2026-27 (regardless of Budget)
- KiwiSaver employer minimum match steps up to 3.5% on 1 April 2026 (from 3%). Step-up to 4% on 1 April 2027 also legislated.
- KiwiSaver default employee rate steps up to 4% on 1 April 2026 (from 3%). Existing 3% contributors auto-move unless they apply for a temporary rate reduction.
- Working for Families abatement: threshold lifts to $44,900 (from $42,700) and rate rises to 27.5% (from 27%) on 1 April 2026 — Budget 2025 Regulatory Impact Statement, signed 4 April 2025.
- Best Start first-year payment is now income-tested at the same $79,000 / 21% as years 2-3, for babies born on or after 1 April 2026 (universal first-year retained for babies born before that date).
- PAYE thresholds remain as set by Budget 2024 (effective 31 July 2024): 10.5% / 17.5% / 30% / 33% / 39%.
- BrightLine remains 2 years (reverted from 10 years on 1 July 2024).
- Student loan threshold $24,128, rate 12% unchanged unless Budget announces otherwise.
FAQ
What did NZ Budget 2026 actually change on 28 May?
Budget 2026 (delivered Thursday 28 May 2026) confirmed four substantive personal-finance changes effective 1 April 2026: (1) In-Work Tax Credit temporarily boosted $50/week to $147.50 for 2026-27 only; (2) Family Tax Credit + Best Start CPI uplift (FTC eldest $152.30, FTC subsequent $124.10, Best Start $77.70); (3) KiwiSaver default rate and employer minimum step to 3.5% (Stage 2 to 4% deferred to 1 April 2028); 16-17 year-olds become eligible for compulsory employer contributions; (4) Donation tax credit capped at $100,000/year eligible donations (max credit $33,333.33); NFP threshold lifted from $1,000 to $10,000. PAYE, IETC, student loan, ACC, BrightLine, FIF, and GST settings all unchanged.
Did Budget 2026 cut my income tax?
No. PAYE thresholds stay at $15,600 / $53,500 / $78,100 / $180,000 — unchanged since Budget 2024 (31 July 2024). The IETC was also left at $10/week ($24,000–$70,000 income range); Treasury rejected even a $5/week IETC lift on cost ($230M–$560M) and payroll-system lead time grounds. Fiscal drag (bracket creep) continues to lift effective tax rates as nominal incomes rise. The biggest 2026-27 personal cash gain is the temporary $50/week IWTC boost for working families with kids.
I work in the public service — what does the savings drive mean for me?
The ~$2.4 billion savings target is delivered largely through a smaller public sector (reportedly around 8,700 fewer roles, mostly via attrition and back-office streamlining). If you're made redundant, redundancy and severance pay is taxed as income in the period you receive it — which can push that pay period into a higher PAYE bracket — and you may qualify for Jobseeker Support while between roles. Use the redundancy tax calculator and Jobseeker Support calculator linked above to work out the after-tax position.
Does Budget 2026 affect my 2025-26 tax return?
No. The 2025-26 NZ tax year ended 31 March 2026 — eight weeks before Budget night. All Budget 2026 measures start from 1 April 2026 (the 2026-27 year, already in progress) or for the NFP threshold from NFP tax years beginning on or after 1 April 2026. Run your IR3 tax refund estimator against the 2025-26 settings — those values are locked.
What's the KiwiSaver Stage 2 timing after Budget 2026?
Stage 1 (3% → 3.5%) is confirmed for 1 April 2026 — both employer minimum match and default employee rate for new auto-enrolees. Stage 2 (3.5% → 4%) is deferred to 1 April 2028 (earlier 2025 commentary had pencilled it in for 2026 in one step). Existing members keep their elected rate (3%/4%/6%/8%/10%) — no auto-step. Run the KiwiSaver calculator with the 2026-27 toggle for projections.
Where can I read the official Budget documents?
Budget papers go live at budget.govt.nz at 2:00 pm on 28 May. The IRD post-Budget tax policy summary at taxpolicy.ird.govt.nz is the fastest source for personal-tax numeric changes. Treasury Budget Policy Statement and Estimates Volume 1 (Revenue) are the primary documents.
Official sources
- budget.govt.nz — Budget papers go live 2:00 pm on 28 May
- taxpolicy.ird.govt.nz — IRD post-Budget tax policy summary
- treasury.govt.nz — Treasury Budget Estimates Vol. 1 (Revenue)
Last updated 2026-05-27. This page updates live from 4 pm NZST on 28 May with confirmed Budget values. Calculator URLs use the central tax-year config and switch to 2026-27 automatically when the toggle is set.