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
- Income tax rates for sports events
- Applying for an exemption from schedular payments
- Goods and services tax (GST)
- If you're a non-resident receiving income
- 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. The tax rates are on the back of the IR330 under the category "Entertainers (New Zealand resident only) such as lecturers, presenters, participants in sporting events, and radio, television, stage and film performers". The current rate is 20%. You only pay tax on amounts over the $500 threshold. Use the "WT" tax code on your IR330.
You'll need to pay a higher tax rate (currently 35% for the no-notification rate) if you don't complete an IR330.
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 code declaration (IR330), the person or organisation paying you may have to deduct tax from your earnings before paying you. There are different 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.
Most income from sports events has tax deducted at a flat rate of 20%. Tax will be deducted on the portion of prize money over $500.
When tax is deducted you must complete an IR330 and give it to the person paying you. If you don't complete an IR330, your income will be taxed at the no-notification rate of 35% for sportspeople.
You can 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%.
You'll need to register for GST if you:
- have a taxable activity in New Zealand and
- you expect your turnover to exceed $60,000 and
- it's within any 12-month period.
There's no tourist refund scheme for goods you buy here and then take out of the country. There's no tax on goods and services if they're for export, or if you buy them from duty-free stores.
A non-resident contractor is a self-employed person not living in New Zealand.
Tax doesn't have to be deducted from schedular payments if you're:
- a non-resident contractor
- who is eligible through a double tax agreement and
- is in New Zealand for a total of 92 days or less in any 12-month period.
For more information on this, contact our non-resident contractors unit at email@example.com
If you are:
- a non-resident participating in sport in New Zealand and
- don't qualify for an exemption
you're a non-resident entertainer for tax purposes.
You won't need to complete an IR330. The payer will deduct 20% on your gross schedular income with a tax code of WT. You'll only need an IRD number if you are filing an income tax return.
For more information on non-resident entertainers email firstname.lastname@example.org
Tax returns, personal tax summaries and tax codes 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 you'll need to include this in your tax return. Read more in Professional and amateur sportsperson.
When you start your job you'll need to complete a Tax code declaration (IR330) to give to your employer. If your employment details change, you'll need to complete an IR330 to change your tax code.
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.
Date published: 16 Sep 2011