The Independent Earner Tax Credit

Q: What is the independent earner tax credit in New Zealand?

It is a tax credit of $520 a year, about $10 a week, for New Zealand tax residents whose total income is between $24,000 and $70,000 and who do not receive Working for Families, an income-tested main benefit, NZ Superannuation or a Veteran's Pension. It is claimed through tax code ME or ME SL.

Q: What is the income limit for the independent earner tax credit?

The full $520 applies to total income from $24,000 to $66,000. Above $66,000 it abates by 13 cents for every extra dollar and reaches nil at $70,000. Below $24,000 nothing is payable at all: the lower limit is a hard cut-off rather than a taper.

Q: Can I get the independent earner tax credit on Working for Families?

No. Receiving Working for Families tax credits, or an overseas equivalent, rules it out for the period you receive them. The same applies to an income-tested main benefit, NZ Superannuation and a Veteran's Pension. If you or your partner receive Working for Families, your main-income tax code stays M or M SL.

Q: How do I claim the independent earner tax credit?

By using tax code ME, or ME SL if you have a student loan, on your highest-earning job. That delivers it through your payslip at about $10 a week. If you stay on M while eligible, you have not lost it: Inland Revenue includes it in the end-of-year assessment after 31 March and pays it as one amount.

Q: Do I get the credit if I only worked part of the year?

The credit is based on your total income for the tax year, so a part year that ends below $24,000 of income does not qualify. If you received an excluded payment such as a main benefit for only part of the year, the credit is apportioned to the part of the year in which you did not receive it.

$520 a year for people earning a middle income who receive no other government support. Who qualifies, exactly how much at each income, and why the band published on several New Zealand sites is four years out of date.

The independent earner tax credit is $520 a year, about $10.00 a week, for New Zealand tax residents whose total income is $24,000 to $70,000 and who receive no Working for Families, main benefit, NZ Superannuation or Veteran's Pension. You claim it through tax code ME.

Who qualifies

Four conditions, all of which have to hold. The first is the one people get wrong, because it is about every source of income you have rather than about one job.

Your total income for the tax year is $24,000 to $70,000. Every job added together, plus any taxable pension, ACC weekly compensation, rental profit or other taxable income. Two jobs paying $30,000 and $18,000 count as $48,000, not as two incomes.
You are a New Zealand tax resident. Residence is a condition of the credit, not just of the tax code.
You receive none of the excluded payments. Working for Families or an overseas equivalent, an income-tested main benefit, NZ Superannuation and a Veteran's Pension each rule it out on their own. This applies to your household in the case of Working for Families, so a partner receiving it ends your entitlement too.
You claim it, through your tax code or your return. Nothing is paid automatically during the year. Tax code ME is the claim.

Nothing about your work matters. Hourly or salaried, one job or three, full-time or eight hours a week, permanent or fixed term. The credit is read off the total and the exclusions, and nothing else.

How much you get at each income

The credit is flat across most of its range and then tapers. It does not taper in at the bottom: at $23,999 of total income you receive nothing, and at $24,000 you receive the full $520.

Independent earner tax credit by total income, 2026–27 tax year
Total income	Credit for the year	A week
$23,999	$0.00	$0.00
$24,000	$520.00	$10.00
$40,000	$520.00	$10.00
$60,000	$520.00	$10.00
$66,000	$520.00	$10.00
$67,000	$390.00	$7.50
$68,000	$260.00	$5.00
$69,000	$130.00	$2.50
$70,000	$0.00	$0.00

Above $66,000 the credit reduces by 13 cents for every extra dollar of income, so the whole $520 is gone across the $4,000 between $66,000 and $70,000. Inside that band, an extra dollar of income costs 13 cents of credit on top of the income tax and ACC earners' levy it already attracts.

Superseded figures you will still see published

Until 31 July 2024, the credit abated from $44,000 and reached nil at $48,000. That band was repealed and replaced with the current one, which abates from $66,000 to nil at $70,000.

Several widely read New Zealand payroll, accounting and money-transfer sites still publish the repealed band. The practical effect is that someone earning $60,000 is told they earn too much, when they qualify for the full $520 and have been leaving $10.00 a week on the table.

The figures on this page are the ones in force for the 2026–27 tax year (1 April 2026 to 31 March 2027), verified against Inland Revenue's published guidance on 30 July 2026. The source is linked in the panel beside this page.

How the credit reaches you

There are two routes and they deliver the same $520. What differs is when.

Through your payslip, on code ME. Payroll subtracts the credit from your PAYE every pay run, so you receive about $10.00 a week more in your account across the year. Add a student loan and the code is ME SL. This is the only route that pays it during the year.
In the end-of-year assessment, on code M. Inland Revenue applies the credit when it assesses your year after 31 March, whether or not you used ME. Staying on M does not forfeit it. It defers it, and you have lent Inland Revenue $520 for up to a year without interest.

The assessment is also what corrects an over-claim. Use ME and finish the year above $70,000, or start receiving Working for Families partway through, and the credit you received through your payslip is recalculated and the excess becomes payable. tax code ME, with worked examples on both sides of the abatement threshold.

The exclusions in full

Any one of these ends the entitlement, whatever your income. They are the reason the credit exists: it is targeted at earners who receive no other income support.

Working for Families (or an overseas equivalent)
An income-tested main benefit
NZ Superannuation
A Veteran's Pension
Not a New Zealand tax resident

Where one of them applied for part of the year only, the credit is apportioned to the part of the year in which it did not. An income-tested main benefit means one of the main benefits under the Social Security Act 2018: Jobseeker Support, Sole Parent Support, the Supported Living Payment, Youth Payment, Young Parent Payment and the Emergency Benefit. Supplementary assistance such as the Accommodation Supplement is not a main benefit. The tax code finder asks the exclusion question directly, then names the code you should be on.

Common questions

What is the independent earner tax credit in New Zealand?

A tax credit of $520 a year, about $10.00 a week, for New Zealand tax residents whose total income is $24,000 to $70,000 and who receive none of the excluded payments. It is claimed through tax code ME or ME SL.

What is the income limit for the independent earner tax credit?

The full $520 runs from $24,000 to $66,000 of total income. Above $66,000 it abates by 13 cents in the dollar and reaches nil at $70,000. Below $24,000 nothing is payable, and that lower limit is a hard cut-off rather than a taper.

Is the independent earner tax credit still $24,000 to $48,000?

No. That band was repealed on 31 July 2024. The credit now abates from $66,000 to nil at $70,000, rather than from $44,000 to nil at $48,000. Sites still publishing the old band describe a $60,000 income as ineligible when it qualifies for the full $520.

Can I get the independent earner tax credit on Working for Families?

No. Working for Families, or an overseas equivalent, rules it out for the period you receive it. So does an income-tested main benefit, NZ Superannuation or a Veteran's Pension. Your main-income code stays M or M SL.

How do I claim the independent earner tax credit?

By using tax code ME, or ME SL with a student loan, on your highest-earning job. Stay on M while eligible and you have not lost it. Inland Revenue includes it in the assessment after 31 March and pays it as one amount.

Do I get the credit if I only worked part of the year?

It is based on your total income for the tax year, so a part year finishing below $24,000 does not qualify. Where an excluded payment applied for only part of the year, the credit is apportioned to the part of the year in which it did not.

Where these figures come from

2026–27 tax year (1 April 2026 – 31 March 2027). Last verified 30 July 2026.

tax code MEWhat the credit does to your payslip, week by week
the student loan suffixThe credit with a student loan attached
what tax code am IFive questions, including the credit test
changing your tax codeMoving to ME, and when it takes effect
New Zealand tax codesEvery code and rate in one table
the New Zealand tax year1 April to 31 March, and when the credit is squared up