A non-resident contractor is a non-resident person, company or entity contracted to provide services, the use of another person’s services, or the use of equipment in New Zealand.
This page is for non-resident contractors who are self-employed.
|About non-resident contractors
Employees, non-resident entertainers and sportspeople are not non-resident contractors.
If the contractor provides their services from outside New Zealand and does not have any presence in New Zealand, they are not a non-resident contractor.
Payments made to the non-resident contractor are called schedular payments. Payers must generally deduct tax from these payments and pay it to Inland Revenue on behalf of the contractor.
Some non-resident contractors are exempt from withholding tax or may apply for a tailored rate.
Any tax deducted is a credit if the non-resident contractor needs to file a tax return in New Zealand.
Non-resident contractors who employ staff or subcontractors may have additional obligations in respect of the payments they make. See the Employer's guide - IR335 for more information about these obligations.
Non-resident contractors with an annual turnover above $60,000 may need to register for GST.
Withholding tax on payments to non-resident contractors
Unless there is an exemption, payers must deduct tax on payments made to non-resident contractors.
The rate is usually determined by the type of work performed and whether the contractor has provided a completed IR330C Tax rate notification for contractors. The default rate is currently 15%.
Higher rates are used if the form is not complete. These are called 'no-notification' rates.
You will need an IRD number unless you have full tax relief under a treaty between New Zealand and your country of tax residence.
See 'Contact us' on this page if you're not sure whether you need an IRD number.
Exemptions from withholding tax
The payer does not have to withhold tax in the following situations.
- You have a certificate of exemption.
- You meet the 92-day rule under a double tax agreement.
- The payments you receive are below a $15,000 threshold.
You may still need to file a tax return and pay tax on the payments received despite being exempt from withholding tax.
Certificate of exemption
You can apply for a certificate of exemption from withholding payments in the following situations.
- A double tax agreement between New Zealand and your country of tax residence provides an exemption from income tax.
- You provide a bond or other security to ensure you pay any tax you need to.
- You've met all your obligations in the last 2 years and will continue to do so.
You do not have to apply for a certificate of exemption from withholding tax if you come from a country that has a DTA with New Zealand and you're eligible for total New Zealand tax relief under that agreement. You must also be present in New Zealand for a total of 92 or fewer days in any 12-month period.
Payments under $15,000
You also do not have to apply for a certificate of exemption if the total contract payments you receive as a non-resident contractor from all your payers is $15,000 or less in a 12-month period.
Tailored tax rate certificate
Non-resident contractors can apply for a tailored tax rate which is higher or lower than would otherwise apply. This might, for example, be relevant when the contractor has other income or losses.
You might want to use the following tool to calculate your rate of tax.
Estimate your tax rateGo to this tool
File an income tax return in New Zealand
You may need to file an income tax return in New Zealand at the end of the tax year or when you leave New Zealand.
This will not be necessary if your only income is exempt under a DTA between New Zealand and your country of tax residence.
Accident compensation corporation (ACC) levies
As a self-employed person, you're liable for paying ACC levies on your New Zealand income. This is New Zealand's accident insurance scheme.
Tax credits for withholding tax
You can deduct any withholding tax against your final liability in New Zealand when you file a tax return.
A detailed discussion of interpretative issues and practical matters can be found in Tax Information Bulletin Vol 22, No. 7 - Aug 2010 under:
- 'Interpretation Statements - IS 10/04: Non-resident contractor schedular payments' on page 29.
If you have any questions, you can contact us by phone, email or post at:
Non-resident Contractors Team
PO Box 2198