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Working for Families Calculator New Zealand 2025/26

Estimate your Working for Families tax credits: FTC, IWTC, and Best Start. See how income abatement affects your entitlement and compare weekly, fortnightly, and lump-sum payment options.

Working for Families 2025/26: FTC up to $7,015/yr (first child). IWTC $3,770/yr. Abatement 27% above $42,700. Cannot receive WfF and IETC simultaneously.
$
Combined family income before tax (all sources)
Affects IWTC hours requirement
hrs
Each partner needs 20+ hrs/wk for IWTC
Child 1
Child 2
—
Estimates only. Actual entitlement determined by Inland Revenue (IRD). Consult a tax adviser for your situation.

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How to Use This Calculator

Tab "WfF Estimate"

Enter your household income (combined family income before tax), select your family type (couple or sole parent), enter your hours worked per week, and add each child with their age. The calculator shows your Family Tax Credit (FTC), In-Work Tax Credit (IWTC), Best Start Tax Credit (BSTC), total entitlement before and after abatement, and the weekly, fortnightly, and annual amounts.

Tab "Income Impact"

This tab shows a table of how WfF changes across the full income range from $20,000 to $150,000. It highlights where abatement starts ($42,700), the abatement rate (27c per $1), and the approximate break-even income where WfF reaches zero. Useful for understanding how a pay rise affects your entitlement.

Tab "Payment Options"

Compare three ways to receive your WfF payments: weekly, fortnightly, or as a lump sum at the end of the tax year. Amounts are calculated from your inputs in the WfF Estimate tab. The tab also outlines the pros and cons of each frequency.

The Formulas

Family Tax Credit (FTC):
First child (under 16): $7,015/yr
Second and subsequent children (under 13): $5,756/yr
Children aged 13–15: $5,756/yr

In-Work Tax Credit (IWTC):
Base rate (1–3 children): $3,770/yr
Additional children (beyond 3): +$780/yr per child
Hours requirement: 20 hrs/wk (couples), 30 hrs/wk (sole parents)

Best Start Tax Credit (BSTC):
$3,338/yr per child under 1 (universal — no income test)
Ages 1–3: income-tested (abates above $79,000 at 21.25%)

Abatement formula:
Abatement = max(0, income − $42,700) × 0.27
WfF after abatement = max(0, total WfF − abatement)

Payment frequency:
Per week = annual WfF ÷ 52
Per fortnight = annual WfF ÷ 26
Lump sum = full annual entitlement (claimed after year-end tax return)

All rates from Inland Revenue (IRD) for the 2025/26 tax year. WfF is governed by the Tax Credits (Working for Families) provisions of the Income Tax Act 2007.

Example

Couple, 2 children aged 2 and 5, household income $75,000

Both partners work 40 hours per week. Neither child is under 1, so Best Start does not apply.

FTC — first child (age 5)$7,015/yr
FTC — second child (age 2)$5,756/yr
IWTC (couple, 40 hrs each)$3,770/yr
Total before abatement$16,541/yr
Income above threshold ($75,000 − $42,700)$32,300
Abatement (27% × $32,300)−$8,721/yr
Total WfF after abatement$7,820/yr
Per week$150.38/wk

This family receives approximately $150 per week or $7,820 per year from Working for Families. The abatement of $8,721 reflects the 27% rate applied to the $32,300 of income above the $42,700 threshold.

Working for Families Key Facts 2025/26

CreditRate (per year)Conditions
Family Tax Credit (FTC) — first child$7,015Child under 16
Family Tax Credit (FTC) — subsequent$5,756Each child under 16
In-Work Tax Credit (IWTC) — 1–3 children$3,77020 hrs/wk couples; 30 hrs/wk sole parents
IWTC — each additional child beyond 3+$780As above
Best Start Tax Credit (BSTC)$3,338 per childUniversal under age 1; income-tested age 1–3
Abatement threshold$42,700Household income before tax
Abatement rate27%Per dollar above $42,700
WfF and IETCMutually exclusiveCannot receive both simultaneously
Payment optionsWeekly, fortnightly, lump sumApply via myIR (IR526)
Governing legislationIncome Tax Act 2007Subpart MA–MF

Frequently Asked Questions

To qualify for Working for Families, you must: be a New Zealand tax resident; be caring for a dependent child or children under 18 for more than half the time; have a household income below the level at which WfF fully abates. Some credits have additional requirements — IWTC requires minimum work hours, and BSTC is universal under age 1 but income-tested after that. Self-employed, employees, and beneficiaries may all qualify for FTC.
The Family Tax Credit (FTC) is the main payment — it is available to all qualifying families regardless of work status, and is based on the number and ages of children. The In-Work Tax Credit (IWTC) is an extra payment for families where parents are working the required minimum hours — it rewards workforce participation. The Best Start Tax Credit (BSTC) is a universal payment for newborns in the first year of life, with no income test; from age 1 to 3, it is income-tested.
Once your household income exceeds $42,700, your Working for Families entitlement reduces by 27 cents for every extra dollar earned. For example, earning $50,000 means $7,300 above the threshold, which reduces WfF by $1,971 (27% × $7,300). The higher your income, the less WfF you receive. At a high enough income, WfF is fully abated and reaches zero. The calculator shows the exact abatement for your situation.
Yes, self-employed people can qualify for Working for Families. For the IWTC, self-employed parents count their hours of self-employment toward the minimum hours requirement (20 hrs/wk for couples, 30 hrs/wk for sole parents). FTC and BSTC are available to self-employed families on the same basis as employees. You typically claim WfF through your annual tax return (IR3) or by applying through myIR for regular payments during the year.
If you receive WfF weekly or fortnightly during the year, Inland Revenue estimates your entitlement based on expected income. At the end of the tax year, IRD compares your actual income with the estimate. If you were paid too much (because your actual income was higher than estimated), you may need to repay some WfF. If you were paid too little, you will receive a top-up. To avoid this, you can choose to receive WfF as a lump sum after filing your tax return — but this means waiting until after the year ends.

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