Who can get schedular payments and what you need to consider if you choose to be paid this way, or if you are making schedular payments to contractors who receive schedular payments.
Who gets schedular payments?
Contractors doing certain activities or services, or contractors working in certain industries, where the supply mainly consists of labour.
A contractor can be an individual, partnership, trust or company. Contractors can be New Zealand tax residents or non-resident taxpayers.
Some examples of contractors getting schedular payments are:
- an IT project manager contracted by a recruitment agency (labour hire business) to one of the agency's clients
- a builder contracted to a labour hire business
- a freelance journalist paid to write a magazine article
- an insurance agent or salesperson paid commission
- a company director paid directors’ fees
- a commercial cleaning partnership paid by a local business to clean their offices
- companies contracted to supply labour to the agricultural, horticultural or viticultural sectors
- non-resident contractors, entertainers and sportspeople.
Some prize money won in competitions may also be schedular payments.
There are special rules for non-resident taxpayers getting schedular payments.
Non-resident entertainers and sportspeople
Working out your tax rate
You’ll need to tell your payer the correct tax rate so they withhold the right amount of tax from your payments. You can find out which rate you should be using on the IR330C form.
If you think your rate should be lower than that on the form, use our calculator to estimate the rate and apply for a tailored tax rate. You cannot use a tax rate lower than 10% without applying for a tailored tax rate.
Work out and declare my tax rate for schedular payments
Apply for a tailored tax rate for schedular payments
Do you need to register for GST?
You need to register for GST if you earn $60,000 a year or more (before expenses) from your schedular payments, or if you add GST onto your prices.
Read more about how GST works and what this means for you.
Manage tax rates to avoid debt
If you do not declare the right tax rate for your schedular payments during the year, you’ll have tax to pay at the end of the year. If you do not pay your tax debt, we may enforce a prescribed withholding rate.
Schedular payments with a prescribed withholding rate
Declare your tax rate by notifying the person paying you
The Tax rate notification for contractors - IR330C lists the activities which schedular payments can be paid for.