Salary Plus Self-Employed Tax Calculator NZ 2026

Rates current for the 2026/27 tax year. Reviewed 5 August 2026.

Quick answer On a $70,000 salary with $30,000 of self-employed income and $5,000 of expenses, the side work adds $8,444.50 to your tax bill at the end of the year. That is an effective 33.78% on the $25,000 of side profit, because your salary has already used up the lower brackets. Hold back 28.15% of every self-employed payment and the bill is funded before it arrives.
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A salary and a side business are taxed as one income, not two. Your employer deducts PAYE as though the salary is everything you earn, because it is all they can see, and nothing at all is withheld against your self-employed profit. That profit is then stacked on top of the salary when your return is filed, which means it is taxed starting from the rate your salary had already reached rather than from the bottom of the scale. The practical effect surprises almost everyone who does it for the first time. A person on $70,000 has already used the 10.5 and 17.5 percent bands entirely, so their side income begins at 30 percent and may cross into 33 percent, producing an effective rate roughly double the one most people assume. Two people doing identical side work for identical money will owe different amounts depending only on what their day job pays. This calculator shows the whole picture: the tax on your salary alone, the tax on the two combined, the difference between them, and the share of each self-employed payment you should be holding back so the bill is already covered when it lands.

Extra tax owed at year end
$8,444.50
Not covered by your PAYE
Effective rate on side profit
33.78%
Including ACC earner levy
Hold back from each payment
28.15%
of gross side income

Where the extra tax comes from

Salary$70,000.00
Self-employed profit (income less expenses)$25,000.00
Combined taxable income$95,000.00
Tax on salary alone (your PAYE covers this)$13,220.50
Tax on combined income$21,227.50
Additional income tax$8,007.00
ACC earner levy on side profit$437.50
Total additional owed$8,444.50
Top bracket your side income reaches33%
Effective rate on side profit33.78%
Reserve from gross side income28.15%

Which bands your side income falls into

Your salary fills the scale from the bottom. The side profit occupies whatever comes next, which is why its rate depends on your day job.

BandRateUsed by salaryUsed by side profitTax on side profit
This is an estimate, not tax advice. It covers income tax and the ACC earner levy. It does not model GST, the ACC work levy (which varies by classification unit), student loan repayments, KiwiSaver, Working for Families, or provisional tax instalment dates. Confirm your position with Inland Revenue or your accountant.

Why the same side income costs two people different amounts

Nothing about the side work changes its own tax rate. What changes is how much of the lower brackets your salary has already consumed. Someone earning $40,000 still has part of the 17.5 percent band left, so their first few thousand of side profit is taxed there. Someone earning $150,000 is already in the 33 percent band and every dollar of side profit is taxed at 33 percent from the start. The work is identical; the bill is not. This is also why advice of the form "put aside 20 percent for tax" is unreliable for anyone with a job as well: it is right only for a narrow range of salaries and wrong everywhere else.

The second year is the hard one

The first year you simply owe the additional tax when you file. If that amount is large enough to bring you into the provisional tax regime, the following year you pay instalments toward the new year's tax while also settling what was owed for the old one. Two years of tax can therefore fall due within a few months of each other. Nothing has gone wrong when this happens, but it catches people who budgeted only for the first bill.

Worked example

A salaried employee earns $70,000 and runs a side business bringing in $30,000 with $5,000 of deductible expenses, so the side profit is $25,000. Tax on the salary alone is $13,220.50, and their employer has deducted that through PAYE across the year. Combined income is $95,000, on which the tax is $21,227.50. The difference, $8,007.00, is additional income tax that nothing has been withheld against. The ACC earner levy adds $437.50 on the side profit, bringing the total to $8,444.50.

Against $25,000 of profit that is an effective 33.78%, and against the $30,000 of gross side income it is 28.15%. The reason it is so far above 17.5 percent is visible in the band table: the salary has already filled the 10.5 and 17.5 percent bands and most of the 30 percent band, so $8,100 of the side profit is taxed at 30 percent and the remaining $16,900 at 33 percent.

How this is calculated

Side profit is self-employed income less deductible expenses. Tax on the salary alone and tax on the combined total are each calculated using the personal rates in force from 1 April 2025: 10.5% to $15,600, 17.5% to $53,500, 30% to $78,100, 33% to $180,000, and 39% above that. The additional income tax is the difference between the two. The ACC earner levy is 1.75% applied to the side profit, but only to the portion of combined earnings below the maximum liable earnings of $156,641, so a salary at or above that maximum produces no further earner levy. The effective rate is total additional owed divided by side profit; the reserve percentage is the same total divided by gross side income.

Related NZ calculators

Data sources: the rates and thresholds on this page are maintained against Inland Revenue and ACC. Figures are checked twice monthly.

Frequently asked questions

Why is my side hustle taxed more than I expected in New Zealand?

Because it is stacked on top of your salary rather than taxed from the bottom of the scale. Your salary has already used up the low brackets, so the first dollar of self-employed profit is taxed at whatever rate your salary reached, and it can push you into the next bracket as it grows. On the default figures a $70,000 salary has already consumed the 10.5 and 17.5 percent bands, so $25,000 of side profit is taxed partly at 30 percent and partly at 33 percent. That produces an effective rate on the side income far above the 17.5 percent many people assume applies.

Does PAYE on my salary cover my self-employed income?

No. Your employer deducts PAYE as though your salary is your only income, because that is all they know about. Nothing is withheld against your self-employed profit, so the whole of the additional tax falls due when you file. This is why people with a salary and a side business are so often surprised by their first bill: nothing was ever wrong with the PAYE, it simply was not calculating the same thing.

Do I pay ACC levies on side income as well as on my salary?

Yes. The ACC earner levy already comes out of your salary through PAYE, and it also applies to your self-employed profit. The levy is charged on your combined liable earnings up to an annual maximum, so if your salary alone already exceeds that maximum, no further earner levy is due on the side income. Self-employed work may also attract an ACC work levy, which depends on your classification unit and is billed separately by ACC.

When do I have to pay the extra tax?

The additional tax is due as terminal tax after you file your return for the year. If it exceeds the residual income tax threshold, you will also be brought into the provisional tax regime for the following year, which means paying that year's tax in instalments while still settling the previous year. That combination is what makes the second year harder than the first, and it is worth planning for before it arrives.

What percentage of my side income should I set aside?

Use the reserve percentage this calculator produces rather than a rule of thumb, because the right figure depends entirely on what your salary has already used up. Two people earning the same side income can owe very different amounts: one on a $50,000 salary and one on a $150,000 salary face different marginal rates on the very same work. The percentage shown is calculated against the gross side income, so it can be applied to each payment as it arrives.