Working for Families
Working for Families pays a family tax credit of $7,921 a year for your eldest child and $6,454 for each other child, plus an in-work tax credit of $7,670 a year if you have income from paid work. Both are paid in full up to a family income of $44,900, then reduce by 27.5% of every dollar above it.
Estimate your entitlement
Family income is both partners combined, before tax. The result assumes the same circumstances for a full year.
Your family
Both partners combined, before tax.
Salary, wages, self-employment or shareholder-employee income. Interest and rent alone do not count.
Total entitlement
Instalment, rounded down
Family tax credit
of $14,375.00 a year
In-work tax credit
of $7,670.00 a year
How the abatement was applied
- Family income above $44,900.00$40,100.00
- Abatement at 27.5%$11,027.50
- Taken off the family tax credit first$11,027.50
- Spilled onto the in-work tax credit$0.00
One abatement, applied to the family tax credit first. Only what it cannot absorb reaches the in-work tax credit. Calculators that abate each credit separately overstate the reduction.
An estimate on the figures you entered, for a full year with the same circumstances throughout. It does not model Best Start, the minimum family tax credit, shared care, or a change of circumstances part way through the year. Inland Revenue calculates the actual entitlement and squares it up after 31 March.
The two credits
| Credit | Per year | Per week | Who gets it |
|---|---|---|---|
| Family tax credit, eldest child | $7,921 | $152 | Any qualifying family |
| Family tax credit, each other child | $6,454 | $124 | Any qualifying family |
| In-work tax credit, first 3 children | $7,670 | $147 | Families with income from paid work |
| In-work tax credit, each child after that | $780 | $15 | Families with income from paid work |
The in-work tax credit figure has an expiry date on it
The in-work tax credit rose to $147 a week from 1 April 2026, up from $97. Inland Revenue publishes the increase with two conditions attached, and both are easy to miss.
It states that the credit "may reduce back to $97 if the cost of petrol drops below $3 a litre for four weeks", and that after 31 March 2027 the maximum entitlement "will return to $97 a week, $5,070 a year".
So the $147 on this page is correct now and wrong from 1 April 2027 unless the law changes again. Any page publishing it without the reversion is publishing a figure with a known end date and not saying so.
One abatement, applied in order
This is where third-party calculators diverge from Inland Revenue. There is a single abatement amount, and it is applied to the family tax credit first. Whatever the family tax credit cannot absorb spills onto the in-work tax credit. The two credits are not abated separately.
$100,000 family income, 2 children
- 1.Full family tax credit$7,921 eldest plus $6,454$14,375.00
- 2.Full in-work tax credit$7,670.00
- 3.Income above $44,900$55,100.00
- 4.Abatement at 27.5%− $15,152.50
- 5.Absorbed by the family tax creditWhich leaves no family tax credit at all$14,375.00
- 6.Spilled onto the in-work tax credit− $777.50
- Entitlement for the year$6,892.50
A calculator that abates each credit by the full $15,152.50 would show nothing at all here. One that stops abating when the family tax credit hits zero would show the full $7,670.00. Inland Revenue's own worked example gives $6,892.50, and this page reproduces it.
Where the family tax credit still pays something
The same $100,000 income with three children rather than two, showing why there is no single income cut-off.
| Children | Full entitlement | Abatement | Family tax credit |
|---|---|---|---|
| 2 | $14,375.00 | $15,152.50 | $0.00 |
| 3 | $20,829.00 | $15,152.50 | $5,676.50 |
| 4 | $27,283.00 | $15,152.50 | $12,130.50 |
The abatement is identical in every row, because it depends only on income. What changes is how much entitlement there is for it to consume. With three children, Inland Revenue's example pays $5,676.50 a year, which is $109 a week.
This is why Working for Families is on a PAYE site
Working for Families is a payment from Inland Revenue, not a deduction from your pay, so it never appears on a payslip. It earns its place here for one reason.
Inland Revenue's glossary states that if you or your partner receive Working for Families tax credits, you do not qualify for the independent earner tax credit. That credit is worth up to $520 a year and is delivered through the ME tax code. So receiving Working for Families is what puts you on M instead of ME, and that changes what your employer deducts every single payday.
Who qualifies for the in-work tax credit
The test is income from paid work, and it is broader than most people expect.
- Salary or wages qualify.
- Self-employment qualifies even at a loss. Earning income from the work is the test, not making a profit from it.
- Shareholder-employee income qualifies where the company is earning, even at a loss after expenses, and whether or not the company pays you a salary.
- Passive income alone does not qualify. Interest, dividends, rent and royalties are not paid work. Combined with paid work, they do not disqualify you.
- A break of 2 weeks or less does not end it. Leave without pay or moving between jobs is fine, but tell Inland Revenue the date it starts or you risk an overpayment to repay later.
How it is paid, and why the weekly figure looks short
If you take payments during the year, your full-year entitlement is divided by 52 for weekly instalments or 26 for fortnightly, and each instalment is rounded down to the nearest dollar. That is why multiplying your weekly payment back up never quite reaches your annual entitlement. The difference is settled when Inland Revenue squares up your entitlement against your actual income after 31 March, which is the same end-of-year process that produces a tax refund or a bill.
What this page does not model
The calculator covers the family tax credit and the in-work tax credit, which are the two payments most families receive. It does not model Best Start, the minimum family tax credit, shared care arrangements, or a change of circumstances part way through a year. It also assumes your family income is stable across the whole year. Inland Revenue calculates the entitlement that actually applies, and its own estimator handles the cases this one deliberately leaves out. See the methodology for what the engine does and does not do.
Next
- Independent earner tax creditThe credit this rules you out of
- The ME tax codeWhy you cannot use it
- Tax code finderWhich code you should be on
- Tax refundThe end-of-year square-up
- take-home pay calculatorYour pay, before any of this
Common questions
How much is Working for Families in NZ?
The family tax credit is $7,921 a year for the eldest child and $6,454 for each other child. The in-work tax credit is $7,670 a year for the first 3 children. Both are paid in full up to $44,900 of family income and reduce above it.
At what income does Working for Families stop?
There is no single cut-off. Entitlement reduces by 27.5% of every dollar above $44,900, and stops once that has consumed both credits. More children means more entitlement to consume, so payments continue to a higher income.
How does the Working for Families abatement work?
There is one abatement, not two. Take your family income, subtract $44,900, multiply by 27.5%. It comes off the family tax credit first, and only the leftover reaches the in-work tax credit.
Can I get Working for Families and the independent earner tax credit?
No. Inland Revenue states that if you or your partner receive Working for Families, you do not qualify for the independent earner tax credit. That is what decides whether your tax code can be ME.
Do I have to work a minimum number of hours?
Not since 1 July 2020. The old tests of 20 hours for a single parent and 30 between two were removed. The current test is simply having income from paid work. Pages still quoting the hours test are out of date.
Why is my weekly payment less than my entitlement divided by 52?
Because instalments are rounded down to the nearest dollar, not to the nearest. The full-year entitlement is divided by 52 or 26, then rounded down. The cents are settled at the end-of-year square-up.
Where these figures come from
2026–27 tax year (1 April 2026 – 31 March 2027). Last verified 30 July 2026.
Related
- Independent earner tax creditThe credit Working for Families rules you out of
- The ME tax codeThe code you cannot use while receiving this
- The M tax codeThe code that applies instead
- Tax refundWhere the end-of-year square-up lands
- take-home pay calculatorYour pay, separately from these payments