What are Schedular Payments?
Posted
3/03/2011 Updated 8/03/2011
If you are carrying out services in certain industries and are a soletrader or partnership, the person or business paying you is required to deduct a pre-determined percentage of your income and pass this onto Inland Revenue on your behalf. Schedular Payments are kind of a self employment PAYE where your employer is your customer. Schedular Payments used to known as Withholding Tax.
Your customer or client needs to advise IRD of how much they've paid you and how much tax they have deducted from your payments. You're still able to claim all of your business operating costs against this income and most of the time a tax refund results at the end of the year if you make these claims. Make sure you keep all of your invoices and receipts for all business costs.
You will also be responsible for paying your own ACC levies on this income and are not entitled to holiday, sick, statutory or Kiwisaver payments from the people paying you.
In some circumstances an exemption certificate may be obtained from IRD to allow full payment from the client then you become fully responsible for making tax payments to IRD.
Only certain industries are required to have Schedular payments deducted, these include self employed labour only builders, agricultural contractors and freelance contributors to newspapers and other media. The IRD have a full list of these industries and are found on their IR330 form, if you’re not sure about this you’re welcome to contact us.
Related Items:
Contractors |
Schedular Payments |
Withholding Tax
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