Bracket creep helps push out the 2015 Tax Freedom Day to May 7, eleven days longer than in 2012

Tomorrow (May 7) is Tax Freedom Day.

This is the first day in 2015 when New Zealand taxpayers stop paying tax and start earning for themselves.

That is according to national accounting firm Staples Rodway.

The date this year is May 7; last year it was May 5. In 2012 it was April 27.

Staples Rodway says it is not necessarily all bad news.

"The key driver of the growing tax take in recent years has been New Zealand’s post-global financial crisis economic recovery. As the economy has recovered, companies are growing and paying more tax, and people are spending more and therefore paying more GST," said David Searle, the firm's managing director.

Searle also points to ‘bracket creep’, which occurs when workers move into a higher tax bracket as their wages grow, as a reason for people paying more tax.

Other contributing factors to the increasing tax take include local body taxes increasing at a faster rate than income taxes; companies and other entities using up losses incurred during the global financial crisis and moving into tax-paying positions; and loopholes related to income from some personal businesses and working for families tax credits being closed.

Staples Rodway has also identified this year’s Tax Freedom Days for Australia - 11 April – and the US – 24 April. Tax Freedom Day for the UK fell on 28 May in 2014 – 2015 figures are not yet available.

“We are consistently three-four weeks later than Australia, and two-four weeks ahead of the UK. Americans have been steadily paying more taxes and their Tax Freedom Day this year is 15 days later than it was in 2010,” says Searle.

“The general trend is that New Zealand is maintaining its position relative to these other markets, and that’s mainly because they’re not doing as well as us. But by reviewing our tax bands regularly and adjusting them for economic growth, we have a real opportunity to become more competitive with Australia and the US.”