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Industry guidelines
Nga aratohu ahumahi
Industry guidelines: Winemakers

Tax on schedular payments (formerly withholding tax), tax codes, tax rates and workers

What schedular payments are

Schedular payments are made to contractors who perform activities outlined in Schedule 4 of the Income Tax Act 2007. These payments are subject to tax at a flat rate even if the contractor is registered for GST. Find a list of the activities in Schedule 4 on the back of the IR330. Go to "Forms and guides".

From 1 April 2006, schedular payments made to companies operating in the horticultural and viticultural industries, for services or work related to the "pruning or thinning of fruit trees or vines", or the "picking or packing of fruit or grapes", must have tax deducted.

Changes have been made to legislation impacting these industries

From 1 April 2010, you need to deduct tax from any payments made to contractors working or providing services under a contract or arrangement for the supply of labour, or mainly for labour, whether provided by an individual, partnership, trust or company when working on land in connection with:

  • fruit crops
  • orchards
  • vegetables or,
  • vineyards.

This does not include work or services by a:

  • post-harvest facility
  • management entity under a formal management agreement under which the entity is responsible for payment for the work or services provided.

Find out more about the 1 April 2010 changes.

Contractor responsibility

Contractors must use a "WT" tax code. However, they may be eligible for a certificate of exemption or a special tax rate.

If the contractor does not have a certificate of exemption and does not give you a fully completed Tax Code Declaration (IR330), you are required to deduct tax at the no-notification rate of 30 cents in the dollar.

Employer responsibility

You must deduct tax from the contractor’s payments at the rate identified on the Tax Code Declaration (IR330) unless they provide you with a valid Certificate of Exemption (IR331) or a certificate that authorises tax to be deducted at a lower rate.

You must show a "WT" tax code when you are completing the Employer monthly schedule (IR348) for a schedular payment recipient.

Schedular payments made to contractors in the horticultural and viticultural industries will need to be recorded on the payer's employer monthly schedule, whether they deduct tax or not. You only need to notify Inland Revenue of the details of the payments if they relate the specific work mentioned above.

 

 


Date published: 21 Jan 2010

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