Donation Tax Credit

New Zealand tax residents who donate $5 or more to an IRD-approved donee organisation (registered charities, schools, churches, and similar bodies) can claim a tax credit of 33.33% (one-third) of the amount donated. Unlike a deduction, a tax credit reduces your tax bill directly rather than just your taxable income.

The credit is capped at your taxable income for the year — if your total donations exceed your taxable income, only the amount up to your taxable income is eligible. For most PAYE-only earners, IRD works out the credit automatically from donation receipts uploaded via myIR or supplied by the donee, and pays it out as a refund after the tax year ends (you don't need to wait for your main income tax assessment).

Budget 2026 (28 May 2026) announced a new annual dollar cap of $100,000 on eligible donations for the credit — but this cap does not start until 1 April 2027, first applying to the 2027-28 tax year. For the 2024-25, 2025-26, and 2026-27 tax years, only the taxable-income cap applies; there is no dollar ceiling on eligible donations.