To be among the top 10 percent of wage and salary earners in New Zealand, you now need to make at least $135,000 annually. The threshold for the top 1 percent stands at about $290,000. Inland Revenue's latest data reveals that the top 10 percent earned approximately $57.9 billion out of the total $199.7 billion in wage and salary income, accounting for about 29 percent of all such income. Meanwhile, the bottom decile received only $768 million, or 0.4 percent.
Simplicity chief economist Shamubeel Eaqub noted that higher income earners have not seen wage increases that match inflation since 2019. He highlighted that real incomes have increased for the bottom half of earners, particularly those making between $60,000 and $100,000. However, even significant nominal increases for top earners do not translate into real gains. The share of income at the top 1 percent has actually shrunk slightly.
Otago University economist Murat Ungor observed that the wage and salary income distribution has narrowed between 2019 and 2026. Nominal income at the 10th percentile rose by about 60 percent, while at the 90th percentile, it increased by only 39 percent. In real terms, the gains were much smaller, with the 10th percentile seeing about 23 percent growth, compared to slightly negative growth at the 99th percentile. The rise in the minimum wage from $16.50 to $23.50 and a tight labor market in 2021 and 2022 likely contributed to these changes.
Ungor cautioned that the figures require careful interpretation. They reflect annual PAYE-reported wage and salary income, not hourly pay, and include part-time and part-year workers. The data also do not capture the full income of high earners, such as shareholder-employee salaries without PAYE deductions or income retained within companies and trusts. The 39 percent top marginal tax rate introduced in 2021 may have influenced how high earners receive their income, though more evidence is needed to confirm this.