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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.
Tax for sportspeople
If you're an employee with salary or wages from sports
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.
Prize money paid at sporting events
Tax will be deducted on prize money over $500. You'll need to complete a Tax rate notification for contractors (IR330C) form, using the activity "Entertainers (New Zealand resident only) such as lecturers, presenters, participants in sporting events, and radio, television, stage and film performers". You can choose the rate of tax you want deducted (not less than 10%) or use the standard rate of 20%.
If you don't complete an IR330C, your income will be taxed at the no-notification rate of 45%.
Provisional tax is tax paid in instalments during the year when income has not been taxed or not enough tax has been deducted as you earn it. The amount and number of instalments depends on which provisional tax option you use.
When you file your tax return, the provisional tax you've paid is deducted from the tax you owe. You will then only need to pay any balance or you may be entitled to a refund of any overpaid amount.
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.
Your business records
If you're self-employed it's important to keep accurate and complete records for seven years. Your business records should include:
- banking information
- proof of income and expenses
- cash books and wage books.
Applying for an exemption from tax deducted from schedular payments
If your employer is making scheduler payments to you, you may be able to apply for a Certificate of exemption (IR331). This is so tax won't 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.
Goods and services tax (GST)
In certain circumstances you may be required to register for GST, or you may choose to complete a voluntary registration.
Tax returns for sportspeople
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 and the correct tax rate has been applied.
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 request one if you believe you're entitled to a refund.
If you receive a scheduler payment of prize money of more than $500 you'll need to include this in your IR3 tax return. Prizes of less than $500 won't have tax deducted, and don't need to be included.
When you start as an employee you'll need to complete a Tax code declaration (IR330) to give to your employer. If your circumstances change you may need to complete an IR330 to change your tax code.
When you start 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.
Filing a tax return if you're self-employed
If you're self-employed you'll need to file an IR3 individual tax return.
Claiming expenses on schedular payments
If you receive schedular payments you can claim allowable business expenses against your income when you file your IR3.