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Are you paying a non-resident contractor to work in New Zealand? 

What you need to do

You will need to deduct tax from the payments and pay it to us ─ unless an exemption applies.  

Paying non-resident contractors 

60-day grace period

If you’re required to deduct tax and have not done it yet, you have 60 days to file the required return and make a deduction if all the following apply: 

  • you made schedular payments to a non-resident contractor 
  • at the time the payments were made, you had reasonable grounds to believe an exemption applied   
  • some, or all, of the tax is unpaid at the due date 
  • you can show you tried to meet your obligations for the schedular payments. 

The 60-day grace period will run from the earlier of 1 of the following: 

  • the date you did not make the deduction and file the return  
  • the date it was reasonable that you realised you should have deducted tax and filed the return.   
Steve stays in New Zealand for over 92 days

On 1 July 2024 Steve comes to NZ as a non-resident contractor to a NZ construction company. 

It is an 80-day contract, so he qualifies for the 92-day exemption. This means, the New Zealand company that pays him does not have to deduct tax from his schedular payments.  

Steve stays over the 92 days   

On 1 September 2024, the company extends Steve’s contract to 28 February 2025. On the same day, the company books Steve on a flight back to Germany to leave New Zealand on 1 March 2025.  

Tax must be deducted after all 

Because Steve is now staying in New Zealand longer than 92 days, the exemption no longer applies. The company must deduct tax from all his schedular payments.   

The company must work out the tax on all of Steve’s past schedular payments (from day 1). Once they have calculated the right amount, they pay this to us in a lump sum.   

60-day grace period

Although Steve’s exemption would have expired on 1 October 2024, the company should reasonably realise the exemption would no longer applies when they extended Steve’s contract.  

The construction company meets the requirements for the 60-day grace period, but this would start from 1 September 2024 when they extended the contract. This means the company has until 31 October 2024 to file and pay the tax for the schedular payments. 

Last updated: 28 Mar 2024
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