Are kiwis paying more tax than other countries?

The income tax rate, the rate that every New Zealander pays on every dollar that they earn, is always a hot topic, especially around election time. But how much are we actually paying, and how does the New Zealand income tax rate compare to other countries? One thing most of us do know, is that our income tax has dropped in recent years, especially in the higher income tax brackets, but how far has it dropped? In a nutshell, are Kiwi’s paying more income tax than other countries?

New Zealand’s taxes are based on a tax paradigm known as “broad-based, low-rate”. In real terms, what this means, is that we get taxed on a lot of things, but at lower overall rates. These various taxes include New Zealand income tax, corporate tax, GST and others. This also means that New Zealanders, compared to some countries, pay less in income tax. Of course this is all relative, our closest neighbour, Australia, is usually the peg by which we measure ourselves on issues such as income tax. The following table gives a pretty telling comparison:

Income Tax Rates:

Income Australia vs New Zealand (PAYE)

$1 – $6,000 0% 12.2%

$6,001 – $37,000 15% 19.2%

$37,001 – $80,000 30% 31.7%

$80,001 – $180,000 37% 34.7%

$180,001 and over 45% 34.7%

As you can clearly see from the table above, New Zealand income tax rates are higher than Australian rates in all but the highest of tax brackets. What this means is that the average kiwi is paying a higher income tax rate than their Australian equivalent.

What about further afield? Comparing income tax rates outside of New Zealand and Australia is always tricky as there are many complexities in different tax codes and factors that need to be taken into account. If we look at Europe, we will probably be pleasantly surprised. Some countries, such as France, Germany and Belgium have personal income tax rates as high as 50%. As high as that seems, factors such as government benefits, free education and healthcare must be taken into account. In reality, it is like comparing apples with pears.

So are we paying too much income tax? For the average New Zealander the answer is probably yes. But you can always make the most of the tax you pay by getting a personal tax refund from – ensuring you get any overpaid tax back where it belongs, in your pocket.

This article was written by Tom Taylor for


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