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.
Step 1: Type of work
Step 2: Tax rate option
Step 3: Payment details
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
- Income Tax Act 2007 - Schedule 4
- IRD - Schedular payments
- IR330C Tax rate notification for contractors (PDF)
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