Schedular Payments Calculator
Estimate withholding tax from an IR330C payment and test whether your chosen rate is likely to cover annual income tax.
Net payment
$800.0020.0% WT deducted
Withholding tax
$200.00GST excluded from WT
$0.00Estimated refund
$4,342.00- • Withholding is calculated on the GST-exclusive payment at 20.0%.
- • Withholding is a tax credit, not your final income-tax liability. You still claim business expenses and reconcile through your year-end assessment or IR3.
- • The year-end estimate models incremental income tax only. ACC levies, tax credits, losses and tailored IRD assessments are not included.
- • Schedular payments do not by themselves require an IR3. Your payer reports them to IRD, so if they are your only income IRD assesses you automatically and writes to you ("Information required to complete income tax assessment") to collect any expenses you want to claim. You must file an IR3 if you also had income IRD cannot see — self-employment paid gross, rental, overseas, bright-line, partnership, trust or shareholder-employee income — or more than $200 of schedular payments that were never reported to IRD.
What is a schedular payment?
A schedular payment is a payment to a contractor — not an employee — for one of the activities listed in Schedule 4 of the Income Tax Act 2007: things like director's fees, commission, labour-only building work, cleaning, entertainment, agricultural contracting, and payments made under a labour hire arrangement. The payer must deduct withholding tax (tax code WT) before paying you, in the same way an employer deducts PAYE. If your work doesn't match any listed activity and isn't salary or wages, it's ordinary self-employment or business income instead — no withholding applies, and you manage your own tax through provisional tax.
Every contractor must give each payer a Tax rate notification for contractors (IR330C) stating their chosen activity and rate. Without one, the payer has to deduct at the no-notification rate.
Labour hire arrangements vs other contracting
A labour hire arrangement is where a labour hire business — a recruitment agency, on-hire business or contract management firm — pays a worker to perform work or services directly for its client (or a client of another person), instead of for the labour hire business itself. The client pays the labour hire business, which then pays the worker. This structure alone is what brings the payment into the schedular payment rules, regardless of the type of work actually performed: an IT contractor placed by a recruitment agency is caught by activity 19 even though "IT contracting" itself isn't a listed Schedule 4 activity. The same person contracted directly by the end client, with no labour hire business in the chain, would only have withholding applied if their specific activity happens to appear on the Schedule 4 list.
The other practical difference is the exemption route. Most contractors with a clean compliance record can apply for a certificate of exemption so no tax is withheld at all. A resident contractor paid under a labour hire arrangement cannot use a certificate of exemption for those payments — the only way to a 0% deduction rate is a tailored tax rate certificate (below).
Choosing your rate on the IR330C
The IR330C flowchart gives you three ways to set a rate for a source of contracting income:
- Standard rate — the rate IRD sets for your listed activity (table below).
- Self-selected rate — any rate you choose, as long as it's not below the statutory minimum for your residency status.
- Tailored tax rate — a rate IRD works out for your circumstances, shown on a certificate you give your payer (see below).
A representative slice of the Schedule 4 activity list (the full table runs to 27 rows — see the IR330C form linked below):
| Activity | Standard rate | No-notification rate |
|---|---|---|
| Company directors' fees | 33% | 45% |
| Contracts wholly/substantially for labour only in the building industry | 20% | 45% |
| Cleaning (office, business, institution — not residential) | 20% | 45% |
| Commission agents (insurance sub-agents, salespeople) | 20% | 45% |
| Entertainers (NZ resident) — presenters, performers, sporting participants | 20% | 45% |
| Labour hire arrangement — paid by a labour hire business to work for its client | 20% | 45% |
| Agricultural, horticultural or viticultural contracts | 15% | 45% |
| Forestry or bush work | 15% | 45% |
| Non-resident contractor (not a company) | 15% | 45% |
| Non-resident contractor (a company) | 15% | 20% |
| Non-resident entertainers and professional sportspeople visiting NZ — fixed rate, cannot self-select | 20% | N/A |
Minimum elected rate and the no-notification rate
If you self-select a rate rather than using the standard one, IRD sets a floor: 10% for a New Zealand-resident contractor, or 15% if you're a non-resident for tax purposes or hold a temporary entry-class visa. This floor is set by residency status, not by activity — a labour-hire contractor elects against the same 10% floor as everyone else; their distinguishing rule is the certificate-of-exemption restriction above, not a different minimum. Non-resident entertainers and professional sportspeople visiting New Zealand can't choose their own rate at all — theirs is fixed at 20%.
If you don't give your payer a completed, valid IR330C, they must deduct at the no-notification rate of 45% — except for a non-resident contractor company, where it's 20%. It's a default, not a penalty rate you're stuck with: any of it that overshoots your real liability comes back as a refund at square-up, but it ties up cash all year in the meantime.
Tailored tax rate (special tax rate) certificate
If the minimum or standard rate would leave you paying noticeably too much or too little tax — typically because your deductible expenses are unusually high or low for your activity, or you have losses to carry forward — you can apply for a tailored tax rate (TTR), historically called a special tax rate. Apply in myIR (Tailored tax application) or by post with an IR23BS form. IRD generally responds within 10 working days (longer in February/March) with a letter and a certificate showing your approved rate, which can be as low as 0%. Show the original certificate to your payer alongside your IR330C, and note it's only valid for one tax year — you reapply annually. For a labour-hire contractor this is the only route to a below-minimum or 0% rate, since a certificate of exemption isn't available to them.
Withholding is a credit, not your final tax — the square-up
Whatever rate ends up applying, the amount withheld is a credit against your end-of-year income tax, not a final settlement. You still declare your gross schedular income, deduct your allowable business expenses, and calculate the actual tax on the net figure through your income tax return (usually an IR3). The withholding credit is subtracted from that bill: overshoot and you get a refund, undershoot and you pay the difference — the "square-up".
If the shortfall (your residual income tax, or RIT) comes to more than $5,000, you pick up a provisional tax obligation for the following year, usually calculated as 5.0% on top of this year's RIT under the standard uplift method. Provided that RIT stays under the $60,000 safe harbour threshold, paying your terminal tax bill in full by its due date means you avoid use-of-money interest on the year's instalments even if you didn't pay them on time — see our provisional tax due dates guide and first-year safe-harbour calculator for the mechanics.
Worked examples: from invoice to square-up
1. GST-registered cleaning contractor, standard rate. Aroha runs a GST-registered commercial cleaning business — IR330C activity 5, standard rate 20%. She invoices a client $2,300.00 for a month's work, GST included. Because she's GST-registered, the payer first strips GST at 15% to get the GST-exclusive base — $2,000.00, with GST of $300.00 — and withholds tax only on that exclusive figure: $400.00 at 20%. Aroha is paid $1,900.00 in total (net schedular payment plus the GST passed straight through), and the payer separately accounts for the $300.00 in its own GST return. Over the 2026-27 year she invoices $24,000 (GST-exclusive) for similar jobs and claims $4,000 of cleaning supplies, mileage and insurance as expenses, leaving $20,000 of taxable schedular income. Her withholding for the year totals $4,800.00 at the flat 20% rate, but her actual income tax on $20,000 comes to only $2,408.00. Because withholding is a credit rather than a final tax, she's due a refund of about $2,392.00 at square-up — the flat rate has no way of knowing about her deductible expenses.
2. Labour-hire contractor, an elected rate that's too low. Ben is placed by a recruitment agency — a labour hire business — to work full-time for one of the agency's clients: a labour hire arrangement, IR330C activity 19, standard rate 20%. On a single $2,000.00 payment, the same job is taxed very differently depending on what's on file: no IR330C at all means the no-notification rate of 45%, withholding $900.00 and paying Ben only $1,100.00; the activity's own standard rate of 20% would withhold $400.00, paying $1,600.00; Ben instead self-selects the statutory floor for a resident contractor, 10% — the lowest rate the flowchart allows without a tailored-rate certificate — withholding just $200.00 and paying him $1,800.00. Over the 2026-27 year Ben earns $100,000 gross from the agency and claims $10,000 of work-related expenses, leaving $90,000 of taxable income. At 10% his agency withholds only $10,000.00 across the year, but his actual income tax on $90,000 comes to $19,577.50 — a square-up shortfall of $9,577.50 due at terminal tax time. Because that shortfall (his RIT) is above the $5,000 threshold, Ben now has a provisional tax obligation for next year — roughly $10,056.38 under the standard uplift method. His RIT is still comfortably under the $60,000 safe-harbour threshold, so he won't be charged use-of-money interest on next year's instalments as long as he pays the terminal tax bill in full by the due date. A tailored tax rate certificate, applied for before the year started, would have avoided both the shortfall and the new provisional tax obligation.
GST, deductible expenses and ACC levies
GST is excluded from the withholding base
If you're GST-registered and your invoice includes GST, the payer calculates withholding on the GST-exclusive amount only, then adds the GST back on top when paying you (example 1 above). The GST itself is never subject to withholding — it's accounted for separately through your own GST return.
Expenses you can still claim
Withholding doesn't replace ordinary business accounting. You still declare gross schedular income and claim the deductions any contractor or sole trader can — materials and tools, vehicle running costs apportioned for business use, a home-office proportion, professional fees, and business insurance — against that gross figure in your income tax return, keeping invoices and receipts as evidence.
ACC levies are separate
Schedular-payment withholding never includes ACC earners' levy, KiwiSaver or student loan deductions — payers are explicitly told not to deduct them. Once you've filed your return, ACC invoices you directly for your earner's and (if self-employed) work levy, based on the earnings your return declares. Budget for that invoice separately; it isn't covered by the WT already withheld from your payments.
Frequently asked questions
Are schedular payments final tax?
No. The amount withheld is a tax credit. Contractors generally declare gross income and eligible business expenses, then reconcile the final liability through their income-tax assessment.
Is withholding deducted from GST?
When a GST-registered contractor's payment includes GST, withholding is calculated on the GST-exclusive amount.
Is there an amount below which no tax is withheld?
Not for resident contractors — withholding applies from the first dollar of a schedular payment. There are two thresholds worth knowing. A non-resident contractor does not have tax withheld where total contract payments from all payers are $15,000 or less in any 12-month period, or where they are in New Zealand for 92 days or fewer in any 12-month period and a double tax agreement relieves the income. Neither threshold decides whether you file. Schedular income of any size does not by itself require an IR3: a schedular payment is a PAYE income payment (Income Tax Act 2007, s RD 3), so once your payer reports it, IRD assesses it automatically and writes to you to collect any expenses you want to claim. The separate $200 limb applies only to income IRD was never told about.
How low can an elected IR330C rate be?
The standard minimum is 10% for resident contractors and 15% for non-resident contractors, unless Inland Revenue approves a tailored rate. The maximum elected rate is 45%.
How is a labour-hire contractor treated differently?
A labour hire arrangement is where a labour-hire (recruitment or on-hire) business pays you to work directly for one of its clients, rather than for the labour-hire business itself. That arrangement alone brings the payment within the schedular payment rules no matter what kind of work you actually do — the same person contracted directly by the end client might not be caught at all unless their specific activity is on the Schedule 4 list. A resident labour-hire contractor still can't elect below the general 10% minimum, but unlike most contractors they cannot apply for a certificate of exemption — the only way to a 0% rate is a tailored tax rate certificate.
What is a tailored tax rate (special tax rate) certificate, and when should I get one?
If the standard or minimum rate would over- or under-collect against your real year-end bill — commonly because of deductible expenses, carried-forward losses, or (for a labour-hire contractor) wanting a 0% rate — you can apply through myIR or the IR23BS form. Inland Revenue typically issues the certificate within 10 working days, and you must reapply every tax year. Show the certificate to your payer alongside your IR330C.
Use our schedular payments guide for more on who must use IR330C and record-keeping requirements.
Official sources: Inland Revenue — work out and declare a rate, IR330C form and activity table, schedular payments overview (labour hire definition), apply for a tailored tax rate, and the IRD Employer's guide IR335 (GST worked example, ACC treatment, labour hire rules). Checked August 2026.
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