NZ Schedular Payments Calculator (WT Tax for Contractors)

This calculator works out the withholding tax (WT) a New Zealand contractor pays on a schedular payment under Schedule 4 of the Income Tax Act 2007, the rules covering company directors, sports payments, commission, entertainers, modelling, cleaning, forestry, horticulture, shearing and similar work instead of standard PAYE. You choose your type of work from the Schedule 4 categories, each carrying a standard rate of 20% or 33%, then say whether you will submit an IR330C form: use the standard rate, nominate your own rate between 10% and 40%, or go without a form and default to the 45% no-notification rate. You also confirm whether you are GST-registered and enter the payment amount. The calculator returns the WT base, the applicable rate, the tax withheld, any GST added on top, the net amount you actually receive, and the WT credit you can claim back on your IR3 at year-end. It flags a warning if you have no IR330C on file, since the 45% rate is likely to over-tax you until your return is filed, and if a nominated rate falls outside the allowed 10% to 40% range. Use it to check what a payer should be withholding, compare a nominated rate against the standard one, or see how much cash lands in your account after tax and GST. Figures are indicative only; confirm your exact position with IRD or your accountant.

Updated  Implements Schedule 4 of the Income Tax Act 2007 plus IR330C rules.
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Step 1: Type of work

Step 2: Tax rate option

Step 3: Payment details

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For GST-registered contractors, enter the GST-exclusive amount (WT is calculated on the net before GST).

How schedular payments work

If you're a contractor doing work covered by Schedule 4 of the Income Tax Act 2007, the payer must deduct withholding tax (WT) before paying you. They pay the WT directly to IRD. You receive the gross payment minus the WT (and GST is added on top if you're GST-registered). At year-end you include the gross payment in your income tax return and claim the WT as a tax credit.

Schedule 4 activities (most common)

  • Company directors and board members: 33%
  • Sports payments: 33%
  • Public office holders, examiners: 33%
  • Commission and sales: 20%
  • Entertainers (resident and non-resident): 20%
  • Modelling: 20%
  • Cleaning, forestry, horticulture, shearing: 20%
  • Labour-hire arrangements: 20% minimum
  • Default for other Schedule 4 activities: 20%

Nominated rate (IR330C)

Contractors can elect their own rate between 10% and 40% (15% minimum for non-residents) by completing the IR330C form. This is useful if:

  • Your marginal tax rate is below the standard schedular rate (you'd over-pay tax)
  • You have significant deductible expenses (claiming them via the standard rate would mean a big year-end refund)
  • You want to match WT to your actual tax position to avoid a year-end bill

GST treatment

WT is always calculated on the GST-exclusive portion. If you invoice $1,150 including GST: $150 is GST (paid to you in full, you account for it in your GST return), and $1,000 is the WT base. With a 20% standard rate, $200 is withheld, you receive $800 plus the $150 GST = $950 total. Your gross income for tax purposes is $1,000 and you have a $200 tax credit.

When schedular payment rules don't apply

Payments to NZ-resident companies are generally exempt from schedular payment rules. Exceptions: non-resident contractors, non-resident entertainers, and labour-hire firms. Look-through companies (LTCs) and partnerships ARE subject to schedular payment rules.

Sources

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Frequently asked questions

What is a schedular payment in NZ?

A schedular payment is a payment to a contractor (not an employee) for an activity listed in Schedule 4 of the Income Tax Act 2007. The payer must withhold tax at the rate specified for that activity and pay it to IRD on the contractor's behalf. Common examples include company directors' fees (33%), commission (20%), entertainers (20%), and most other Schedule 4 activities (20%). The contractor includes the gross payment in their income tax return and claims the WT as a tax credit.

Can a contractor choose their own withholding rate?

Yes. Contractors can elect a 'nominated rate' between 10% and 40% via the IR330C form. This is useful if the standard schedular rate is too low (causing year-end tax bills) or too high (tying up cash flow). The minimum nominated rate is 10% (15% for non-resident contractors), and certain individuals such as labour-hire contractors must use a minimum rate. If you don't nominate a rate, the standard rate for your activity applies.

How does GST interact with schedular payments?

WT is calculated on the GST-EXCLUSIVE portion of the payment. If you invoice $1,150 including GST, the payer withholds tax on $1,000 (the GST-exclusive amount). The $150 GST is paid to the contractor in full (the contractor accounts for it in their GST return). Many systems handle this automatically: the contractor invoices a gross amount, the payer deducts GST mentally, withholds WT on the net, and pays the contractor the GST plus the post-WT net.

What if I don't provide an IR330C form?

If you don't complete an IR330C form (or don't provide an IRD number), the payer must withhold tax at the no-notification rate of 45%. This is the highest possible withholding rate and applies to ALL of your schedular payments until you submit a valid IR330C. For most contractors, you'll be significantly over-taxed at this rate and have to wait until you file your tax return at year-end to get the excess back.

Are companies subject to schedular payment rules?

Generally no. Payments to NZ-resident companies are exempt from schedular payment rules unless the company is one of: a non-resident contractor, a non-resident entertainer, or a labour-hire firm. This is one reason why many contractors operate through limited companies. However, payments to look-through companies (LTCs) and partnerships ARE subject to schedular payment rules if the underlying activity is listed in Schedule 4.