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Your tax responsibilities
If you receive income from sports activities in New Zealand you may have to pay tax and file an income tax return. Read more about your tax responsibilities.
- If you're an employee with income from salary or wages
- Tax on prize money paid at sporting events
- Provisional tax paid throughout the year
- If you're self-employed
- Your business records
- Applying for an exemption from schedular payments
- Goods and services tax (GST)
- Tax returns, personal tax summaries and tax codes for sportspeople
- Filing a tax return if you're self-employed
- Claiming expenses on schedular payments
Your tax will automatically be deducted under the pay as you earn (PAYE) system. This means your tax has already been deducted when you get your pay. PAYE includes tax and ACC earners' levy, providing you with accident cover for injuries outside work.
Tax must be paid on prize money over $500. Use the standard rate of 20% found on the back of the Tax rate notification for contractors (IR330C) form under the category "Entertainers (New Zealand resident only) such as lecturers, presenters, participants in sporting events, and radio, television, stage and film performers", or you can choose the rate of tax you want deducted (not less than 10%) and write this on the IR330C. You only pay tax on amounts over the $500 threshold.
If you don't complete an IR330C, your income will be taxed at the no-notification rate of 45%.
Although some business income may have no tax deducted as you earn it, there is a way to pay your tax through the year. It's called provisional tax and it's paid in instalments during the year. The amount of instalments depends on how often you file (if GST-registered) and which provisional tax method you use.
When you file your tax return, the provisional tax you've paid is deducted from the tax you owe. This makes your end-of-year payment smaller.
If your tax to pay on your last income tax return is more than $2,500, you'll have to pay provisional tax for the next year.
If you're self-employed and your activity is one of the occupations listed on the back of the Tax rate notification for contractors (IR330C), the person or organisation paying you may have to deduct tax from your earnings before paying you. There are different standard rates for different activities.
If you're self-employed, ACC invoices you directly for your earner's levy.
If you're self-employed it's important to keep accurate and complete records. Your business records should include:
- banking information
- proof of income and expenses
- cash books and wage books.
You can keep your records stored electronically, but you need to be able to print them out if asked to. You'll need to keep all your business records for 7 years.
You may be able to apply to us for a Certificate of exemption (IR331). If you have a certificate of exemption, tax will not be deducted from schedular payments you receive. A certificate of exemption is issued for one year and needs to be renewed by 1 April each year.
GST is a value-added tax on most goods and services in New Zealand. The current rate is 15%. In certain circumstances you may be required to register for GST, or you may choose to complete a voluntary registration.
Tax returns, personal tax summaries, tax codes and rates for sportspeople
You won't need to file a tax return if your only income is from salary and wages.
You may receive a personal tax summary (PTS) if you require an end-of-year tidy-up on your tax. It will show any tax you have to pay or refund you will receive. If you don't receive a PTS you can still request one if you believe you're entitled to a refund.
If you receive prize money of more than $500 you'll need to include this in your tax return.
When you start your job as an employee you'll need to complete a Tax code declaration (IR330) to give to your employer. If your employment details change, you may need to complete an IR330 to change your tax code.
When you start your job as a contractor you'll need to complete a Tax rate notification for contractors (IR330C) to give to the person paying you. If your circumstances change, you may need to complete a new IR330C to change your tax rate.
If you're self-employed you'll need to file an IR3 individual tax return.
You'll need to attach either a copy of your financial records or a form that shows your total income and expenses. You'll need to send it to us by 7 July, after the end of the tax year (31 March). If a tax agent is preparing your return, you may be able to file it by a later date. Your tax agent arranges this for you.
If you receive schedular payments you can claim expenses against your income when you file a tax return.