Payroll: Tax on schedular payments
Tax on Schedular payments (formerly withholding payments)
Who is subject tax on schedular payments?
- Self-employed contractors, and
- companies operating in the horticultural and viticultural industries
who perform "activities subject to schedular payments" are liable for tax as outlined in Schedule 4 of the Income Tax Act 2007. (The term "schedular payments" refers to activities in this schedule).
These contractors/companies must use a WT tax code. However, they may be eligible for a certificate of exemption or a special tax code.
Requirements for horticultural and viticultural industries
Schedular payments made to contractors/companies in the horticultural and viticultural industries will need to be recorded on the payer's employer monthly schedule, whether they deduct tax or not. The requirement to notify us of the details of the payments only relates to payments made for the specific work mentioned above.
Employer responsibilities
You must deduct tax at the rates specified on the back of the IR330 from payments to the above workers, unless they provide you with a valid Certificate of exemption (IR331).
You must show a WT tax code when you are completing the Employer monthly schedule (IR348) for a schedular payment recipient.
What are schedular payments (formerly withholding payments)?
Schedular payments are payments made to a contractor. They are:
- taxed at a flat rate
- deducted even if the worker is registered for GST.
Contractor's responsibility
These deductions are the contractor's responsibility:
- ACC earners' levy
- student loan repayments.
You are not responsible for making these deductions from schedular payments.
Date published: 14 Jul 2008
Back to top
