Self-employed resident contractors including resident entertainers
All payments (excluding GST) made to you as a contractor make up your gross (total before tax) income. This includes payments received to cover work-related expenses (allowable deductions). You should receive an annual summary of earnings from us showing your gross earnings and tax on schedular payments.
Does tax have to be deducted from the schedular payments
Yes, unless one of the following applies:
- you have an exemption certificate
- you have a 0% special tax rate certificate
- the payments are made to your company and they're not payments being made under certain labour hire arrangements.
Filing a tax return
You need to file an annual income tax return detailing your gross (before tax) income, the tax already deducted from that income and any allowable deductions for expenses. This enables you to work out the total tax on your taxable income and will determine how much tax you need to pay or be refunded, if any.
If you are providing services as a company, you'll need to file an Income tax return companies (IR4) or if you are providing services as an individual, you'll need to file an Individual tax return (IR3) income tax return.
Deductions from your gross income
There are a variety of allowable deductions for work-related expenses you can make from your gross income when completing your tax return. You must keep invoices and receipts as evidence to support all expenses claimed.
Paying provisional tax as well as tax on schedular payments
If you owed more than $2,500 in tax at the end of the last tax year or you expect to owe more than $2,500 at the end of this tax year, you may need to pay provisional tax.
Please note that having an exemption from tax deductions does not remove any responsibility you may have to pay provisional tax.
Registering for goods and services tax (GST)
If your gross (total before tax) income, including per diems and allowances, was more than $60,000 over the last 12 months or is likely to be more than $60,000 over the next 12 months, you must register for GST.
You must deduct PAYE from any salary and wages you pay to your employees.
Paying fringe benefit tax (FBT)
If you provide fringe benefits to your employees, you'll need to pay FBT.
Student loan payments
No automatic student loan deductions are made from schedular payments you receive. You'll need to make repayments towards your student loan if your total income is over the annual repayment threshold. Find out what payments you have to make.
Repaying my student loan when I am self-employed or earn other income
Accident Compensation Corporation (ACC) levies
You are responsible for paying your own ACC levies - you'll need to contact ACC for advice.