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New Tax Rates, Higher ACC Levies, and Updated Student Loan Terms Take Effect April 2025
There are several important changes to tax rates, student loan thresholds, and ACC levy rates taking effect from 1 April 2025.
The details below will help you to understand how these changes could impact you.
Tax Rates for the 2026 Income Year
The following tax rates will apply to income earned between 1 April 2025 and 31 March 2026:
- $0 to $15,600: 10.5%
- $15,601 to $53,500: 17.5%
- $53,501 to $78,100: 30%
- $78,101 to $180,000: 33%
- $180,001 and above: 39%
ACC Levy Rates
Wondering why your packcheck is down an extra $10? Changes to ACC levy rates are as follows:
- ACC earners' levy: Increases from 1.60% to 1.67% GST inclusive.
- Maximum earnings: Increases from $142,283 to $152,790.
- Maximum levy: Increases from $2,276.52 to $2,551.59.
Student Loan Thresholds
There are several updates to student loan thresholds and interest rates:
- Annual repayment threshold: No change, remains at $24,128.
- Annual interest rate: Increases from 3.3% to 4.9%.
- Late payment interest rate: Increases from 7.3% to 8.9%.
- Rate of reduced late payment interest (LPI): Increases from 5.3% to 6.9%.
- Significant over-deduction threshold: Increases from $60 to $70.
Extra pay write off threshold
Customers who receive an individual income tax assessment and have an amount of tax owing solely because they received an extra pay during the year, e.g. 53 weekly pays instead of 52, may be eligible for an automatically applied write-off of the tax owing.
For the 2025 income year, these thresholds have been calculated accounting for the tax rates which changed from 31 July 2024.
The new composite write-off thresholds are as follows:
- Pay frequency Weekly, if income is up to and including $180,000 $240, If income over $180,000 $450.
- Pay frequency Fortnightly, if income is up to and including $180,000 $390, If income over $180,000 $810.
- Pay frequency 4-weekly, if income is up to and including $180,000 $740, If income over $180,000 $1580.
Please note that this only applies to individuals who receive an income tax assessment.
If you have any questions or would like to discuss how our services can help you stay ahead, please don't hesitate to get in touch.
