Tax, ACC and GST

What is the independent earner tax credit?

Last verified · Methodology

What it means

The IETC is a tax credit of $10 a week ($520 a year) for New Zealand tax residents whose annual income is between $24,000 and $66,000. Between $66,000 and $70,000 it reduces by 13 cents for every dollar earned, reaching nil at $70,000. These thresholds have applied since 31 July 2024.

You cannot get the IETC if you or your partner receive Working for Families, or if you receive an income-tested benefit, NZ Super, a Veteran's Pension or an overseas equivalent. Employees usually get it each payday by using tax code ME or ME SL. If you use M instead, IRD includes the credit when it squares up your tax after 31 March.

How it is worked out

IETC = $520 - (income - $66,000) x 13% for incomes between $66,000 and $70,000

Example

On $50,000 the credit is the full $520. On $68,000 it has abated to $260.

Run the numbers

Open the Income tax calculator

Related terms

Tax code MTax code M is the main tax code for your only or highest-paying job. ME adds the independent earner tax credit, and SL adds student loan deductions.PAYE (Pay As You Earn)PAYE is the income tax and ACC earners' levy your employer takes out of each pay and sends to Inland Revenue, based on the tax code you give them.ACC earners' levyThe ACC earners' levy funds cover for injuries outside work. For 2026/27 it is $1.75 per $100 of earnings, up to $156,641.
Independent earner tax credit: common questions

The independent earner tax credit is worth up to $520 a year for people earning $24,000 to $70,000 who get no Working for Families or NZ Super.

Use tax code ME with your employer to get it each pay, or leave it to IRD's end-of-year assessment, which adds it to your refund or reduces your bill.

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