Effective Marginal Tax Rate Calculator
See your true effective marginal tax rate — PAYE, ACC, student loan, Working for Families and Best Start abatements stacked. Often 50-90% for NZ middle earners.
About this calculator
This calculator implements Treasury TAWA effective marginal tax rate methodology from NZ Treasury (TAWA) + IRD. Last consulted 18 May 2026. Verify the figures yourself by following the link.
NZ EMTR components (FY 2026-27)
Each abatement stacks on the same gross income- •PAYE top bracket: 39% above $180k
- •ACC earner's levy: 1.75% up to $156,641
- •Student loan rate: 12% above $24,128/yr
- •WfF abatement rate: 27.5¢ per $1 above $44,900
- •Best Start abatement: 21¢ per $1 above $79k
- •Worst-case EMTR (NZ): ~90% (parent on $80-90k)
Source: NZ Treasury — TAWA Model
Disclaimer
This calculator provides estimates for general information purposes only. Results should not be relied upon as professional financial, tax, or legal advice. Tax rates and thresholds are based on publicly available IRD data and may change. Always consult a qualified tax agent or financial adviser for advice specific to your circumstances.
How NZ Effective Marginal Tax Rate (EMTR) stacks
Multiple income-tested levies and abatements all hit the same gross income, producing the EMTR.
- 1
PAYE marginal rate
PAYE_marginal = bracket(annual_income) — 10.5/17.5/30/33/39%
Top bracket 39% above $180,000.
- 2
ACC earner's levy
ACC = 1.75% on first $156,641
Caps out at the liable earnings ceiling.
- 3
Student loan deduction
SL = 12% on income above $24,128
Add 12 percentage points if you have a student loan.
- 4
Working for Families abatement
WfF_abate = 27.5¢ per $1 above $44,900 family income
Effectively another 27.5% tax on this income range.
- 5
Sum to EMTR
EMTR = PAYE + ACC + SL + WfF_abate + Best_Start_abate
Can hit 50-90% for middle-earning families.
Worked example
Inputs: $70,000 family income with student loan, 2 kids on WfF
Result: PAYE 30% + ACC 1.75% + SL 12% + WfF 27.5% = 71.25% EMTR. Of next $100, keep $28.75.
Frequently Asked Questions
What is the Effective Marginal Tax Rate (EMTR)?
How can I reduce my EMTR?
The effective marginal tax rate (EMTR) calculator shows how much of your next dollar of income you actually keep in New Zealand once PAYE, the ACC earner's levy, student loan repayments, and Working for Families and Best Start abatements are stacked together.
How this calculator works
Your published tax bracket is only part of the story. Every extra dollar you earn can attract several deductions at once: the PAYE marginal rate (10.5% to 39%), the ACC earner's levy of 1.75% up to $156,641, student loan repayments of 12% above $24,128, a Working for Families abatement of 27.5 cents per dollar above $44,900 of family income, and a Best Start abatement of 21 cents above $79,000. The calculator adds every component that applies to your situation to produce your true effective marginal rate. The results are often startling: a middle-income parent with a student loan can face an EMTR of 70-90% — far higher than the 39% top statutory rate paid by high earners — which matters when weighing overtime, a pay rise, or a second job.
EMTR components FY 2026-27
| PAYE marginal rates | 10.5% / 17.5% / 30% / 33% / 39% |
| ACC earner's levy | 1.75% up to $156,641 |
| Student loan repayment | 12% above $24,128 |
| Working for Families abatement | 27.5c per $1 above $44,900 family income |
| Best Start abatement | 21c per $1 above $79,000 |
| Worst-case NZ EMTR | ~90% for some middle-income parents |
Abatements only apply while you receive the corresponding payment.
Worked Examples
Parent earning $70,000 with a student loan and Working for Families
EMTR = 71.25% — of the next $100 earned, only $28.75 is kept.
- PAYE marginal at $70,000: 30%
- ACC earner's levy: 1.75%
- Student loan: 12%
- WfF abatement: 27.5%
- EMTR: 30 + 1.75 + 12 + 27.5 = 71.25%
High earner on $190,000, no student loan, no family payments
EMTR = 39% — lower than the $70k parent above, despite the much higher income.
- PAYE marginal above $180,000: 39%
- ACC levy: 0% at the margin — income is above the $156,641 cap
- No student loan, WfF, or Best Start components
- EMTR: 39% — each extra $100 keeps $61
Built and maintained by Konstantin Iakovlev. Data sourced from the IRD and official New Zealand government sources.
Last reviewed: