Amendments enacted in the Taxation (Budget Measures) Act 2024 increase four of the personal income tax thresholds with effect from 31 July 2024. These changes reduce the amount of tax a person is required to pay on their personal income.
The previous and new thresholds are set out below.
The current thresholds have been the same since 2010 (apart from anew top threshold at 39% which took effect in 2021). As wages have grown over time, people have paid more of their incomes in tax. The increase in the thresholds goes some way towards addressing this.
The main points to note:
- Effectively it’s a tax cut for taxpayers which puts more money into their pockets.
- Employees should check their next payslip. The tax deducted should be lower than the previous pay period.
- Leave your accountant to worry about squaring up the new rates starting partway through the financial year.
- For those that go online to file their return, IRD will do the calculating and apply the new blended rates.
