A range of changes making it simpler and less expensive for small and medium-sized business, passed by Parliament last week, also take effect today.
"These changes form a central part of the Government's Jobs and Growth plan and will provide a shot in the arm for our economy at a vital time.
"The tax cuts we have delivered will stimulate the economy in the short term by putting cash people's pockets, and in the longer term by encouraging people to invest in their own skills to earn and keep more money."
BDO Spicers tax partner Iain Craig said, compared with the corresponding time last year, wage earners in all income brackets would be better off.
"Businesses are obviously seriously concerned about cash flow but also the issue of attracting and retaining staff. So from an employer's perspective, these cuts provide significant benefits by easing the pressure to increase wages to keep good staff at this difficult time."
With improved fringe benefit tax exemption on gifts, employers could look to reward their employees in other ways than a pay rise.
The personal tax cuts put extra cash into the pockets of all employees whether they were in the low, middle or high income bracket, he said.
The tax cuts combined an increase in the width of the middle income bands at 21% and 33% and dropped the top rate of tax from 39% to 38% on income above $70,000.
"When considered in conjunction with the pre-election tax cuts introduced on October 1, 2008, the monthly savings are significant compared to 12 months ago," Mr Craig said.
Green co-leader Russel Norman said the Government's tax changes were from a bygone era.
The cuts helped those earning more than $100,000, increasing the poverty gap.
"They are targeting the biggest tax cuts to those who need them the least - those who earn the equivalent of a cabinet minister's salary - when it's those at the bottom who most need the support."
The International Monetary Fund research was clear that a stimulus package worked much better if it targeted tax cuts to those at lower income levels.
High income earners tended to save the tax cuts while lower income earners spent them, he said.
The Green Party policy was that the first $10,000 earned was tax free so everyone got the same size cut. Tax cuts in general did not stack up versus spending on public transport projects and green infrastructure investments.
"You get much bigger bang for your buck if you spend government money on green infrastructure rather than big tax cuts for those on more than $100,000. But the Government doesn't want to for ideological reasons," Dr Norman said.
Council of Trade Unions secretary Peter Conway said there would be good news and bad news for workers today.
The good news was the modest increase in the minimum wage, the increase in employer KiwiSaver contributions to 2%, rest breaks and rights to breast-feeding breaks for mothers, an independent earner tax rebate for some low-paid workers, inflation adjustment to benefits and the implementation of a subsidy where reduced working hours were in certain circumstances agreed as an alternative to redundancy.
The bad news was that workers on $40,000, or less, and who were already receiving Working for Families, would get no tax cut.
"In addition, the changes to KiwiSaver meant that although workers can now opt in at 2% without their employer's agreement, the removal of the employer tax credit means that employers are looking for offsets against wage increases."
According to actuaries, the combined effect of capping the employer contribution at 2%, and other changes, meant that someone on $50,000 would save $143,263 less by age 65 than under the scheme in place last year, he said.
The outlook for workers was not positive with the Government signalling changes to ACC, holidays and public sector jobs. The Government needed to speed up implementation of measures to create and retain jobs and support workers made redundant, Mr Conway said.
