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 bonus is added to your annual salary and the incremental PAYE (the difference in tax on salary+bonus versus salary alone) is the tax on your bonus. This means the bonus is effectively taxed at your marginal rate — the rate that applies to your highest tax bracket.
Many people feel their bonus is taxed more heavily than their regular pay. This is often because of how employers calculate PAYE on extra pay. Under IRD’s extra pay method, the employer calculates annual tax on your salary alone, then annual tax on your salary plus the bonus, and deducts the difference from the bonus payment. If the bonus pushes you into a higher bracket, the portion above that bracket threshold is taxed at the higher rate — which can make the effective tax rate on the bonus seem disproportionately high compared to your average rate on salary.
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 — PAYE on salary alone: On a $70,000 salary, your PAYE is: 10.5% on $15,600 = $1,638, plus 17.5% on $37,900 = $6,632.50, plus 30% on $16,500 = $4,950. Total PAYE on salary: $13,220.50.
Step 2 — PAYE on salary + bonus: Your total income is $78,000. PAYE is: $1,638 + $6,632.50 + 30% on $24,500 ($53,501–$78,000) = $7,350. Total PAYE: $15,620.50.
Step 3 — PAYE on the bonus: The incremental PAYE is $15,620.50 − $13,220.50 = $2,400. The entire bonus falls in the 30% bracket.
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 bonus is added to your annual salary and the incremental PAYE — the difference between tax on salary alone and tax on salary plus bonus — is the tax on your bonus. This means the bonus is effectively taxed at your marginal income tax rate.
Is there a special bonus tax rate in NZ?
No. New Zealand does not have a separate 'bonus tax' rate. Bonuses are taxed as regular income at your marginal PAYE rate. The rate depends on which tax bracket your bonus falls into when added to your salary. If the bonus pushes you into a higher bracket, only the portion above the threshold is taxed at the higher rate.
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. This calculates tax on your annual salary alone, then tax on your annual salary plus the bonus, and the difference is the PAYE on the bonus. This ensures the bonus is taxed at your correct marginal rate rather than a flat withholding rate.
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
Related Calculators
Last updated March 2026. Reflects 2025-26 tax year rates.