Calculators

Tax on a bonus or commission payment

Work out what is left of a New Zealand bonus after tax.

A bonus is an extra emolument. It is NOT taxed at a flat rate, and not at your ordinary rate either. The tax on it is the difference between the tax on your salary plus the bonus and the tax on your salary alone.

That is why a bonus can feel over-taxed and still be right. If it straddles a bracket, part is taxed at the lower rate and part at the higher one, so the effective rate on the bonus lands between them and above your salary's rate. crosses_bracket says when this has happened.

annual_salary matters: the same bonus costs different amounts of tax depending on the salary underneath it.

Two edges are handled. ACC stops at the earnings cap, so a salary already above it means no levy on the bonus at all. Student loan takes 12% of the whole bonus when the salary is over the repayment threshold, but only of the part above the threshold when it is not.

An employer may deduct at a flat rate through the year and let IRD square it up, so a payslip can differ from this while both are correct.

post/v1/bonus-tax

Request

  • Base URL: https://api.calculate.co.nz
  • URL: https://api.calculate.co.nz/v1/bonus-tax
  • Auth: API key in header X-API-Key

Request body

bonus_amountnumber required

Gross bonus or commission, in NZD.

annual_salarynumber required

Regular annual salary, EXCLUDING the bonus. This decides which tax brackets the bonus falls into, so the answer depends on it.

kiwisaver_ratenumber

Employee contribution as a DECIMAL: 0.03 for 3%.

has_student_loanboolean

Whether repayments are deducted.

Example request

{
  "annual_salary": 75000,
  "bonus_amount": 10000,
  "has_student_loan": false,
  "kiwisaver_rate": 0.03
}

Response

Income tax on the bonus, every other deduction, and what is left.

disclaimerstring required

Scope and limits of this calculation.

Example response

{
  "disclaimer": "Estimate only. Employers may deduct a bonus at a flat rate through the year and square it up at assessment, so a payslip can differ from this while both are correct. Not financial or tax advice.",
  "result": {
    "acc_levy": 175,
    "annual_salary": 75000,
    "bonus_amount": 10000,
    "crosses_bracket": true,
    "effective_tax_rate_on_bonus": 32.07,
    "income_tax_on_bonus": 3207,
    "kiwisaver": 300,
    "net_bonus": 6318,
    "student_loan": 0,
    "tax_on_salary_alone": 14720.5,
    "tax_on_salary_plus_bonus": 17927.5,
    "top_bracket_reached": 33,
    "total_deductions": 3682
  }
}

Changes

No recorded changes to this operation across all 1 revision of this API.