Marginal Tax Rate

Your marginal tax rate is the tax rate that applies to your next (or last) dollar of income — in other words, the rate of the highest tax bracket you fall into. In NZ's progressive system, different portions of your income are taxed at different rates, and only the income within each bracket is taxed at that bracket's rate.

For 2025-26, the marginal rates are: 10.5% (up to $15,600), 17.5% ($15,601–$53,500), 30% ($53,501–$78,100), 33% ($78,101–$180,000), and 39% (over $180,000). If you earn $80,000, your marginal rate is 33% — but that 33% only applies to the $1,900 above $78,100.

The marginal rate is important when evaluating the tax impact of additional income — such as a bonus, pay rise, or side income. Each extra dollar will be taxed at your marginal rate, not your effective rate. This is also the rate relevant for choosing your correct secondary tax code and PIR.