NZ Tax Guide for Farmers (2025-26)
Farming in New Zealand encompasses dairy, sheep and beef, horticulture, and more. Farm employees are PAYE workers. Farm owners may operate as sole traders, partnerships, or through a company or trust. Farming businesses have access to specific tax provisions including livestock valuation methods and immediate deduction for certain farming expenditure.
Quick Tax Snapshot — Median Farmer Salary
Farmer incomes vary enormously. Employed farm workers earn approximately $50,000–$70,000. Farm owners and managers can earn $80,000–$150,000+, though this depends heavily on commodity prices, farm size, and ownership structure.
| Item | Annual | Monthly |
|---|---|---|
| Gross Salary | $65,000 | $5,417 |
| Income Tax (PAYE) | −$11,721 | −$977 |
| ACC Levy (1.6%) | −$1,086 | −$90 |
| KiwiSaver (3%) | −$1,950 | −$163 |
| Take-Home Pay | $50,244 | $4,187 |
Key Deductions for Farmers in NZ
Livestock and farm expenses
Farm running costs including feed, fertiliser, veterinary fees, and crop inputs are deductible business expenses. Livestock can be valued under the national standard cost scheme or herd scheme.
Machinery and equipment depreciation
Farm machinery, tractors, irrigation equipment, and farm buildings are depreciated over their useful lives. IRD publishes depreciation rates for agricultural assets.
Farm vehicle expenses
Vehicles used in the farming business (ATVs, utes, tractors) have running costs that are fully or mostly deductible based on business use.
Land improvements
Certain land development and drainage costs on farming land are immediately deductible rather than capitalised, under special farming provisions in the Income Tax Act.
Deductibility depends on individual circumstances. Consult a registered tax agent or accountant for personalised advice. See IRD guidance on individual expenses.
Frequently Asked Questions
How are farmers taxed in New Zealand?
Farm employees pay PAYE on wages. Farm owners pay income tax on their net farming income at individual rates (or 28% through a company). Farm income is seasonal, so provisional tax is used to spread payments across the year.
What is the herd scheme for livestock valuation?
The herd scheme is a livestock valuation method where livestock is valued at annually-set national herd values. Changes in herd value are not included in taxable income, which can smooth out the tax impact of rising livestock prices. Farm owners choose between the herd scheme and the national standard cost scheme.
Do farmers pay GST on their produce?
Most agricultural produce sales are subject to 15% GST in New Zealand. Farmers with turnover over $60,000 must register for GST and can claim back GST on farm inputs. GST is typically returned on a 6-monthly basis for farming businesses.
What are the tax rules for farm succession in NZ?
Transferring a farm to the next generation can involve income tax on assets sold above their book value. New Zealand does not have an inheritance tax or capital gains tax on family homes, but farm property may trigger depreciation recovery and other income tax issues. Professional advice is essential for farm succession planning.
Calculate Your Actual Take-Home Pay
The figures above are based on a median salary estimate. Use our free calculator to see your exact take-home pay for your own salary — including student loan repayments if applicable.
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See NZ tax breakdowns for other common professions:
Calculations assume 2025-26 tax year, 3% KiwiSaver employee contribution, no student loan, and ACC earner's levy at 1.6% (capped at $152,790). Figures are estimates only. New Zealand has no personal allowance — income tax applies from the first dollar of income.
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