Tax on schedular payments

Employers must deduct tax on schedular payments (formerly withholding payments) from contractors performing activities outlined in schedule 4 of the Income Tax Act 2007. From 1 April 2010, there are legislative changes that impact contractors working in the horticulture and viticulture industries.

Taxing activities called schedular payments

There is a range of activities that are liable for tax on schedular payments. The tax rate differs according to the activity.

Certificates of exemption from withholding tax (IR331)

Employers do not need to deduct withholding tax from payments made to contractors who hold a current certificate of exemption from withholding tax. Certificates must be renewed by the contractor each year.

Tax on schedular payments (formerly withholding payments)

Self-employed contractors, and companies operating in the horticultural and viticultural industries are usually liable to pay tax on schedular payments (formerly withholding payments). Employers must deduct tax at a flat rate from payments made to contractors. Contractors are responsible for their own ACC earner's levy and student loan repayments.

Date published: 12 Feb 2007

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