NZ Taxation Advisory Blog

What Are Schedular Payments? Schedular payments are payments made to contractors for specific types of work or activities. These payments are defined under Schedule 4 of the Income Tax Act 2007 and are subject to withholding tax. This means that the payer (the business or individual making the payment) is required to deduct tax from the payment before passing it on to the contractor. The rules governing schedular payments are outlined in Section RD 8 of the Income Tax Act 2007. This section provides the legal framework for how these payments should be treated for tax purposes. Tax Deduction from Schedular Payments The payer is responsible for withholding the correct amount of tax and forwarding it to the Inland Revenue Department (IRD). To determine the appropriate tax rate, payers can refer to the Tax Rate Notification for Contractors (IR330C) form. this form includes a comprehensive list of activities that qualify as schedular payments. Examples of these activities include constructi...

Tax Rate Notification Contractors are required to provide an IR330C - Tax Rate Notification for Contractors form. If this form is not submitted, the no-notification tax rate of 45% will apply to their payments. GST Registration for Contractors Contractors must register for GST if their gross income (total before tax), including allowances (such as accommodation) and per diems (daily payments for meals and laundry), meets either of the following criteria: Exceeds $60,000 over the last 12 months Is expected to exceed $60,000 in the next 12 months Links IR330C - Tax Rate Notification for Contractors Deductions from Payments to Contractors Self employed Contractors