nz_schedular_payment_calculator
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Work out the withholding tax on a New Zealand schedular payment to a
contractor, and what the contractor is actually left with.
Use for: 'withholding tax on contractor payment', 'schedular payment tax
rate', 'IR330C rate', 'director fee tax NZ', 'what tax do I deduct from a
contractor', 'no IR330C what rate'.
TWO RULES CAUSE MOST OF THE TROUBLE.
WITHHOLDING TAX IS CHARGED ON THE PAYMENT EXCLUDING GST. A GST registered
contractor invoicing $1,000 plus GST bills $1,150, and the withholding is
charged on the $1,000. Charging it on the GST-inclusive figure over-deducts
by 15% of the tax every single time, and it is a common payroll error.
THE RATE DEPENDS ON THE ACTIVITY, NOT ON THE CONTRACTOR. Schedule 4 sets a
standard rate per listed activity. A contractor may elect anything between
10% and 40% on an IR330C. WITHOUT THAT FORM THE PAYER MUST DEDUCT AT 45%,
the no-notification rate, which is punitive by design and catches people who
simply never sent the paperwork back. If someone is being deducted 45%, the
fix is usually a form, not an argument.
THE DEDUCTION IS NOT A FINAL TAX. It is a credit against the contractor's
income tax for the year, so a contractor with deductible expenses usually
gets some back and one with a large profit usually owes more.
year_end_credit is the figure that goes in the return. Do not describe the
deduction as "the tax they paid on that job".
Args:
payment_excluding_gst: The fee BEFORE GST.
activity: Schedule 4 activity, which sets the standard rate.
rate_option: standard, nominated (an IR330C election), or no_form.
nominated_rate_pct: The elected rate, 10 to 40. Required for nominated.
gst_registered: Whether the contractor is GST registered.
Returns:
The invoice, the rate and why it applies, the tax deducted, the net to
the contractor, and the credit claimable at year end.
Input schema
| Property | Type | Required | Description |
|---|---|---|---|
| payment_excluding_gst | number | yes | |
| activity | string | no | |
| rate_option | string | no | |
| nominated_rate_pct | any | no | |
| gst_registered | boolean | no |
Raw JSON schema
{
"properties": {
"payment_excluding_gst": {
"title": "Payment Excluding Gst",
"type": "number"
},
"activity": {
"default": "standard_default",
"enum": [
"company_directors",
"public_office",
"sports",
"commission",
"entertainers_resident",
"modelling",
"cleaners",
"forestry",
"horticultural",
"shearers",
"labour_hire",
"entertainers_non_resident",
"standard_default"
],
"title": "Activity",
"type": "string"
},
"rate_option": {
"default": "standard",
"enum": [
"standard",
"nominated",
"no_form"
],
"title": "Rate Option",
"type": "string"
},
"nominated_rate_pct": {
"anyOf": [
{
"type": "number"
},
{
"type": "null"
}
],
"default": null,
"title": "Nominated Rate Pct"
},
"gst_registered": {
"default": false,
"title": "Gst Registered",
"type": "boolean"
}
},
"required": [
"payment_excluding_gst"
],
"title": "nz_schedular_payment_calculatorArguments",
"type": "object"
}