New Zealand Sole Trader Tax: How Much Should You Set Aside? (2025-26)

Self-employed in New Zealand? Inland Revenue doesn't withhold tax from your invoices, so a slice of every payment belongs to the IRD. Put it aside early and your IR3 is painless.

What tax does a NZ sole trader pay?

You pay individual income tax on your net profit at marginal rates — and unlike most countries there is no tax-free threshold: 10.5% up to $15,600, 17.5% to $53,500, 30% to $78,100, 33% to $180,000, then 39%. On top sits the ACC earners' levy (1.75% for 2026-27, up to NZ$156,641 of earnings).

The simple rule: set aside 25–30%

Saving 25–30% of net profit covers income tax plus the ACC levy for most sole traders. Because there's no tax-free band, don't set aside less than about 20% even at low incomes.

GST kicks in at NZ$60,000

Register for GST once your turnover reaches NZ$60,000 in any rolling 12 months; then you charge 15% and file GST returns (monthly, two-monthly or six-monthly).

Provisional tax

From your second year, if your residual income tax was over NZ$5,000, the IRD asks you to pre-pay next year's tax in instalments — which is exactly what your set-aside pot is for.

Work out your number automatically

Use our free New Zealand sole trader tax calculator, or read the full New Zealand sole trader tax guide. MoneyFeed tracks it live as you text expenses on WhatsApp.