Self-employed tax in New Zealand
Sole traders in New Zealand report business profit on their IR3 individual tax return and pay tax at personal marginal rates, plus the ACC earners' levy. GST applies once turnover reaches NZ$60,000. Here are the 2025-26 headline figures.
The headline figures
- Income tax 2025-26 (on net profit, 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%.
- The ACC earners' levy (1.75% for 2026-27, up to NZ$156,641 of earnings) is collected by Inland Revenue on top of income tax.
- GST registration is compulsory once your annual turnover reaches NZ$60,000; then you charge 15% GST and file GST returns (monthly, two-monthly or six-monthly).
- Provisional tax applies from your second year once residual income tax passes NZ$5,000 — instalments toward your annual bill. A common rule of thumb is to set aside 25–30% of profit.
Quick tax estimate
Estimate your New Zealand tax below. For the full breakdown, open the dedicated New Zealand calculator.
Estimated total tax
NZ$8,918
Effective rate 17.2% on NZ$52,000 net profit
GST: above NZ$60,000 you must register, charge 15% GST and file GST returns. Sole traders report business profit on their IR3 individual tax return and usually pay provisional tax in instalments once residual income tax passes NZ$5,000. The ACC earners' levy shown is a simplified estimate.
Estimates use the 2025-26 IRD income-tax brackets (no tax-free threshold) plus the ACC earners' levy (1.75% up to the maximum liable earnings). GST (15%) is separate. Simplified estimate for planning only — not tax advice.
New Zealand freelancer tax — FAQ
How much tax does a sole trader pay in New Zealand?
You pay individual income tax on your net business profit at marginal rates (10.5% up to $15,600, then 17.5%, 30%, 33% and 39% — there is no tax-free threshold), plus the ACC earners' levy. There is no separate company tax for sole traders.
When do I have to register for GST?
Once your annual turnover reaches or is expected to reach NZ$60,000. You then charge 15% GST on taxable sales and file GST returns. Below the threshold, registration is optional.
What is provisional tax?
From your second year, if your residual income tax was over NZ$5,000, Inland Revenue asks you to pre-pay next year's tax in instalments. Setting aside 25–30% of each payment covers it comfortably.
Figures are current headline guidance for the self-employed, verified against official sources — not tax advice. Check current rules or an accountant for your situation.