The In-Work Tax Credit in New Zealand: how much it pays and who is eligible
Financial advice is provided by Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931). QuoteHub is a trading name.
The In-Work Tax Credit pays up to $147 a week (up to $7,670 a year for up to 3 children), a temporary rise from $97 a week, for the year from 1 April 2026 to 31 March 2027, to families with dependent children who are earning income from paid work and not receiving a main benefit (Inland Revenue, retrieved 9 September 2026). It reverts to $97 a week after 31 March 2027.
How much is the In-Work Tax Credit?
The credit jumped $50 a week from 1 April 2026 as a temporary cost-of-living measure, and the table below sets out the current and prior rates.
The In-Work Tax Credit is currently $147 a week for the first 3 children, and the table below shows the full rates for larger families and the year the temporary increase applies.
| Period | Maximum weekly rate (1-3 children) | Maximum yearly rate (1-3 children) | Extra per child after 3 |
|---|---|---|---|
| 1 April 2026 to 31 March 2027 | $147 | $7,670 | $780 a year |
| Before 1 April 2026, and again from 1 April 2027 | $97 | $5,070 | $780 a year |
(Inland Revenue: In-work tax credit, retrieved 9 September 2026. The rate can also revert early to $97 if the average petrol price drops below $3 a litre for four consecutive weeks.)
How much is the In-Work Tax Credit per week?
$147 a week for a family with 1 to 3 dependent children, for the year 1 April 2026 to 31 March 2027, up from $97 a week the year before (Inland Revenue, retrieved 9 September 2026). Families with 4 or more children get $147 a week plus an extra $15 a week ($780 a year) for each additional child.
How many hours do you need to work each week to qualify for the In-Work Tax Credit?
There is no minimum weekly hour requirement under the current rules. You qualify if you are earning income from paid work and are not receiving a main benefit; the old rule, which required a single parent to work 20 hours a week or a couple to work 30 hours a week between them, was removed for periods from 1 July 2020 (Inland Revenue, retrieved 9 September 2026).
Can a sole parent get the In-Work Tax Credit?
Yes, on the same basis as a couple: a sole parent earning income from paid work, and not receiving a main benefit, qualifies for the In-Work Tax Credit with no separate minimum-hours test since 1 July 2020 (Inland Revenue, retrieved 9 September 2026). Their full entitlement and abatement are worked out the same way as for a two-parent family.
What's the difference between the In-Work Tax Credit and the Family Tax Credit?
The Family Tax Credit is available to any qualifying principal caregiver regardless of employment status, including someone on a main benefit. The In-Work Tax Credit is only available to a family in paid work that is not receiving a main benefit (Inland Revenue: Government payments that affect your Working for Families, retrieved 9 September 2026). Our Family Tax Credit guide covers that payment on its own.
Do self-employed people qualify for the In-Work Tax Credit?
Yes. You qualify if you are self-employed and earning income, even if you make a loss after deducting expenses, and the same applies to a shareholder-employee whose company is earning income, whether or not the company pays you a salary (Inland Revenue, retrieved 9 September 2026). Passive income alone, such as interest, dividends, rent or royalties, does not qualify unless it is combined with income from paid work.
Does the In-Work Tax Credit stop if I go on a benefit?
Yes. Moving onto a main benefit removes your entitlement to the In-Work Tax Credit, though it does not remove your entitlement to the Family Tax Credit (Inland Revenue: Government payments that affect your Working for Families, retrieved 9 September 2026). The table below sets out how each government payment interacts with the In-Work Tax Credit specifically.
Whether another government payment blocks the In-Work Tax Credit depends on the payment, and the table below is Inland Revenue's own comparison.
| You already receive | Still qualify for the In-Work Tax Credit? |
|---|---|
| Main benefit | No |
| Student allowance | No |
| New Zealand Superannuation | Yes |
| Paid parental leave | Yes |
| Unsupported child's benefit | Yes |
| ACC earnings-related payments | Maybe, case by case |
(Inland Revenue: Government payments that affect your Working for Families, retrieved 9 September 2026.)
How does income affect my In-Work Tax Credit?
If your family income is $44,900 or less, you get the full rate. Above that, the credit reduces by the same abatement Inland Revenue applies to the Family Tax Credit: your income above $44,900 is multiplied by 27.5%, and any Family Tax Credit abatement left over is applied to your In-Work Tax Credit first (Inland Revenue, retrieved 9 September 2026).
Can I take a break from work and still get the In-Work Tax Credit?
Yes, for an unpaid break of 2 weeks or less, such as unpaid leave or moving between jobs. You need to tell Inland Revenue the date your unpaid break starts, to avoid being overpaid and having to repay it later (Inland Revenue, retrieved 9 September 2026). A break longer than 2 weeks can affect your entitlement for that period.
How is the In-Work Tax Credit paid?
The same way as the Family Tax Credit: as weekly or fortnightly instalments through the year (your full-year entitlement divided by 52 or 26, rounded down to the nearest dollar), or as a single payment after the tax year ends if you choose not to take instalments (Inland Revenue, retrieved 9 September 2026).
Why did the In-Work Tax Credit increase in 2026?
The Government announced a temporary $50 a week increase, from $97 to $147, effective 1 April 2026, as a cost-of-living measure, with the rate tied in part to fuel prices: it can revert to $97 early if petrol drops below $3 a litre for four consecutive weeks, and it returns to $97 after 31 March 2027 regardless (Inland Revenue, retrieved 9 September 2026).
What happens to the In-Work Tax Credit while I'm on paid parental leave?
You keep it. Paid parental leave is one of the government payments Inland Revenue explicitly confirms does not block the In-Work Tax Credit, unlike a main benefit or a student allowance (Inland Revenue: Government payments that affect your Working for Families, retrieved 9 September 2026). See our paid parental leave guide for the weekly rate itself.
Do I need to apply separately for the In-Work Tax Credit?
No. If you register for Working for Families and meet the eligibility rules for the In-Work Tax Credit, Inland Revenue assesses and pays it alongside your Family Tax Credit as part of the same Working for Families registration, rather than as a separate application (Inland Revenue, retrieved 9 September 2026).
What the In-Work Tax Credit does not cover
The In-Work Tax Credit only applies to working families. If you are not currently in paid work, the table below shows where the other payments in this cluster sit.
| Your situation | Where to look |
|---|---|
| In paid work, not on a main benefit | This page (In-Work Tax Credit) |
| Any employment status, including on a benefit | Family Tax Credit NZ |
| Recently lost your job | Jobseeker Support NZ |
| Child under 3 | Best Start payment NZ |
| Need help with childcare fees to return to work | Childcare Subsidy NZ |
QuoteHub built this cluster because the In-Work Tax Credit is one of the clearest examples of a payment that rewards paid work specifically, which is often the same household where income protection insurance matters most: a payment tied to being in work disappears the moment illness or injury takes that income away, which the Family Tax Credit alone does not replace. Financial advice is provided by Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931). QuoteHub is a trading name. If you would like a licensed adviser to review your cover, start a free comparison.
Related payments and guides
Start with our Working for Families overview if you have not worked out which of the four payments apply to your household, and read it alongside the Family Tax Credit, since most working families qualify for both at once. If a job loss is what has changed your eligibility for this credit, Jobseeker Support in New Zealand and redundancy pay in New Zealand are the next two pages to read, and redundancy law and process in New Zealand if you are unsure whether the redundancy itself was handled fairly. On the new-baby side, parental leave, paid parental leave, Best Start, the Childcare Subsidy and our cost of raising a child in New Zealand guide cover the payments and real costs either side of this one, and the new baby checklist puts everything in order.
Adviser's view
QuoteHub's read is that the most missed eligibility fact here is not about hours worked, it is about the benefit test: the In-Work Tax Credit is unavailable to any family on a main benefit regardless of how many hours a member works elsewhere, which surprises people used to the pre-2020 rules that required a minimum weekly hour count instead.
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Cite this page QuoteHub NZ (2026). In-Work Tax Credit NZ 2026: Amount and Eligibility. www.quotehub.co.nz/guides/new-baby/in-work-tax-credit-nz. Updated 2026-09-09.
References
- Inland Revenue: In-work tax credit
- Inland Revenue: Government payments that affect your Working for Families
- Inland Revenue Tax Policy: In-work tax credit fact sheet
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