Tax the rich now means taxing your senior engineers

The line between an experienced professional and ‘the rich’ has quietly collapsed. In the year to March 2026, you needed just $134,568 in wage and salary income to join the top 10 percent of earners, and about $289,186 to make the top 1 percent. That threshold was roughly $100,000 in 2020.

That is not yacht-club money. It is a senior engineer, an experienced nurse manager, a mid-career accountant in Auckland. And it matters, because this is precisely the group that election tax rhetoric is aimed at.

Top-earner status has gone mainstream

The drift has been relentless. MoneyHub’s analysis of Inland Revenue data finds 21.8 percent of earners now take home over $100,000, up from 7.4 percent in 2016. The share earning over $150,000 has climbed from 0.9 percent in 2006 to 7.3 percent in 2026, an eightfold rise, while the most common income band moved from $33,000 to $63,000.

The longer view is starker. Back in 2023, a $100,000 salary in 2003 had placed someone in the top 1.85 percent; by 2023 you needed over $210,000 to hold the same rank. Then-Infometrics chief executive Brad Olsen calculated at the time that a 2023 earner needed $163,471 to match the purchasing power of $100,000 two decades earlier.

Nominal pay has carried a lot of people over psychological thresholds. It has not made them wealthy.

The ‘rich’ had the weakest pay growth

Here is the part that should give campaign strategists pause. Shamubeel Eaqub, chief economist at Simplicity, says higher earners have ‘generally not experienced wage increases that kept up with inflation since 2019’, with the biggest real gains going to middle earners in the $60,000 to $100,000 band.

University of Otago economist Murat Ungor’s breakdown makes the point bluntly. Against 30.5 percent inflation between 2019 and 2026, real income rose about 23 percent at the 10th and 25th percentiles, 11 to 12 percent at the median, just 7 percent at the 90th percentile, and went slightly backwards at the 99th. Some of the bottom-end growth is compositional, reflecting fewer people on tiny part-year incomes, plus minimum wage increases and a tight 2021-2022 labour market.

The group now labelled ‘top earners’ is the group that has been squeezed hardest in real terms. MoneyHub founder Christopher Walsh puts it simply: ‘$100,000 does not stretch the way it did.’

Real wealth sits outside the payroll data

There is a further irony. Ungor cautions that PAYE figures miss shareholder-employee salaries paid without deductions and income retained in companies and trusts. The genuinely wealthy, in other words, are largely invisible in this dataset. Salaried professionals, who cannot restructure their pay through a trust, are the ones who show up.

So when a party says a higher top rate will hit ‘the rich’, the people most exposed are those with the least ability to avoid it.

Tax pitches meet the arithmetic

The Greens want a 45 percent top rate and Te Pāti Māori 48 percent. Modelling using IRD data shows a 45 percent rate would raise about $1.1 billion on paper, but behavioural responses and lower GST receipts cut the net gain to around $300 million, less than a third of the headline.

The 39 percent rate currently bites above $180,000, a line only 4.1 percent of earners cross. Leave thresholds unindexed and fiscal drag does the rest, pulling more senior professionals into ‘top rate’ territory every year without a single vote in Parliament. That is a tax rise on the middle of the professional workforce dressed up as a levy on the wealthy.

What pay bands should do now

For employers, this is not an abstract debate. Salary bands of $130,000 to $160,000 that read as solid senior roles a few years ago now sit at the top-decile line. Those staff have lost the most ground to inflation, they are mobile, and Australia is a short flight away. Expect sharper negotiations at review time, particularly from people who have watched junior colleagues’ pay catch up.

Compounding the problem, Walsh notes New Zealand still has ‘no good public data on pay by industry’. Most firms benchmark off recruiter surveys and generic salary comparison guides rather than hard data, which makes it easy to underestimate how far senior pay has slipped in real terms.

The election will be fought partly on who counts as rich. On the evidence, a $135,000 salary does not qualify. Any party wanting to tax wealth should go looking where the wealth actually sits, and any employer wanting to keep its best senior people should assume they have done the inflation maths already.

Sources

• RNZ: Are you in the top 10 percent of income earners? (2026-11-06)
• RNZ: How much could NZ raise from a higher top tax rate? We crunched the numbers (2026-11-03)
• IRD: Number of wage and salary earners by income band (2026-08-26)
• IRD: Wage and salary statistics datasets (2026-08)
• The Post: Is $100,000 still a big salary in 2023? (2023-12-29)
• Stuff: Is your salary in the top 10%? Here’s how what you earn compares to other Kiwis