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.

NZ Schedular Payments Calculator (WT Tax for Contractors)

Schedular payments (WT tax) are NZ's withholding tax system for contractors covered by Schedule 4 of the Income Tax Act 2007. The payer deducts tax before paying the contractor, and the contractor claims it as a credit at year-end. This calculator covers all 13 standard categories, applies the GST-exclusive treatment correctly, and handles the IR330C nominated rate option (10% to 40%). Critical: no IR330C means the payer must withhold at the 45% no-notification rate.

Updated April 2026 Implements Schedule 4 of the Income Tax Act 2007 plus IR330C rules.

Step 1: Type of work

Which Schedule 4 activity does this payment relate to?

Step 2: Tax rate option

Will you submit an IR330C form?

Step 3: Payment details

Are you GST-registered?

Payment amount (GST-exclusive)

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

Related calculators

NZ Tax Code Picker — for employees (PAYE codes)
NZ PAYE Calculator — standard salary/wage tax
Business Income Tax Calculator — for the year-end square-up
GST Calculator — if you're GST-registered

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