Side-Hustle Tax Calculator
If you have a PAYE day job and a self-employed side income, IR3 time often brings an unwelcome surprise. This calculator estimates exactly how much you'll owe IRD on the side income — and what to set aside each month so the bill doesn't bite.
PAYE-taxed at source via your M tax code.
Freelance, contracting, Airbnb, online sales — gross.
Mileage, supplies, software, % of home office — see IRD's home office expense guidance.
How side-hustle tax works in NZ
When you have a PAYE day job, your employer withholds income tax + ACC earner levy every payday based on that pay alone. Your tax code (usually M for primary income) tells the employer to apply the standard brackets to that income.
When you also have self-employed side income — freelance, contracting, Airbnb hosting, online sales, gig work — the side income is not PAYE-taxed at source. It's reconciled once a year on your IR3 return. By that point, the side income has pushed your total annual income into higher brackets, but the day-job PAYE was withheld as if the side income didn't exist.
The IR3 wash-up is the gap: extra tax owed = tax on (PAYE + side) − tax already withheld on PAYE. Plus an ACC earner-levy top-up if the combined income is below the ACC cap and your side portion fits below it too.
Frequently asked questions
Why is the tax on side income so much higher than I expected?
Because it's taxed at your marginal rate, not your average rate. If your day-job income already sits at the top of the 30% bracket, every dollar of side income is taxed at 33% or 39% — much higher than the effective rate on your day-job salary.
Do I need to register for GST?
Only if your side income (gross, before expenses) exceeds $60,000 per year. Below $60k you can choose to register voluntarily if you want to claim back GST on business expenses, but it's optional.
Will I have to pay provisional tax next year?
If your residual income tax (RIT) at this year's IR3 exceeds $5,000 (raised from $5,000 effective 2020-21), you'll need to pay provisional tax in three instalments next year — 28 August, 15 January, 7 May.
Does the side income affect my KiwiSaver and student loan?
Yes. KiwiSaver employer contributions only apply to your PAYE salary, but your KiwiSaver self-employed contribution can include side income. Student loan repayments are calculated on your combined income — IRD adds extra repayment to your IR3 bill if your side income takes you over the threshold.
Can I claim home-office expenses?
Yes, if you use part of your home regularly and exclusively for the side hustle. IRD lets you claim a percentage of mortgage interest / rent / utilities based on the floor area used for the business. See our home office expenses guide.
Related calculators
Sources
Tax brackets and marginal rates sourced from IRD — Tax rates and codes. ACC earner levy from ACC — Business levies.