Taxable Income
$100,000.00
Total Tax + ACC
$25,877.50
Net Income
$74,122.50
Self-Employed Tax in NZ
Self-employed individuals pay income tax on their net business profit (income minus deductible expenses). Unlike employees, you must also pay ACC levies directly, including earner, work, and working safer levies.
ACC Levies
Self-employed ACC levies include the earner levy (1.53%), work levy (1.39%), and working safer levy (0.08%). These are calculated on liable earnings up to $142,283.
Provisional Tax
If your residual income tax exceeds $5,000, you must pay provisional tax in 3 instalments throughout the year. The standard method is last year's tax plus 5%.
IETC (Independent Earner Tax Credit)
If your taxable income is between $24,000 and $48,000, you may qualify for the Independent Earner Tax Credit of up to $520 per year. This credit phases out at higher income levels.
IRD-Aligned: Uses 2025-26 NZ tax rates and ACC levy rates.
How income tax, ACC, and provisional tax work when you are your own boss
How is self-employed income taxed in New Zealand?
You pay income tax on your net profit — that is your total revenue minus allowable business expenses. The tax rates are the same as for employees: 10.5% up to NZ$14,000, 17.5% from NZ$14,001 to NZ$48,000, 30% from NZ$48,001 to NZ$70,000, 33% from NZ$70,001 to NZ$180,000, and 39% above NZ$180,000. If your profit is NZ$80,000, you pay about NZ$17,320 in income tax.
What is provisional tax and do I have to pay it?
Provisional tax means paying your income tax in instalments during the year instead of one lump sum after year-end. You must pay provisional tax if your residual income tax (tax to pay after PAYE and other credits) is more than NZ$5,000. Most self-employed people will need to pay it. You can use the standard method, estimate your own tax, or use the AIM method through accounting software.
What ACC levies do I pay as a self-employed person?
You pay two ACC levies: the earner levy (about 1.39% of your liable earnings) and the work levy (varies by industry, averaging about 0.67%). These are capped at earnings of NZ$142,283. On a profit of NZ$100,000, you would pay roughly NZ$1,390 in earner levy and NZ$670 in work levy. ACC covers you for injuries at work and at home.
What business expenses can I deduct?
Any expense that is necessary to earn your self-employed income is deductible. Common ones include: home office costs (proportion of rent, power, internet), vehicle expenses (business kilometres), equipment and tools, professional development, accounting and legal fees, insurance, phone costs, and marketing. You must keep receipts and records for at least 7 years.
How do I claim home office expenses?
You can claim the proportion of your home costs that relate to your office space. If your office takes up 10% of your home's floor area and you work from home full-time, you can claim 10% of your rent or mortgage interest, power, internet, insurance, and rates. On total home costs of NZ$25,000 per year, that would be NZ$2,500.
Do I need to register for GST?
You must register for GST if your turnover exceeds NZ$60,000 in any 12-month period. Once registered, you charge 15% GST on your invoices and can claim back GST on your business expenses. You file GST returns every two months (or six months if your turnover is under NZ$500,000). You can register voluntarily even if under the threshold.
How does KiwiSaver work when I am self-employed?
KiwiSaver is voluntary for self-employed people. You do not get employer contributions, but you can make voluntary contributions and still receive the government contribution of up to NZ$521.43 per year (if you contribute at least NZ$1,042.86). Set up regular payments to your KiwiSaver provider to build your retirement savings.
What records do I need to keep?
IRD requires you to keep records of all income and expenses for at least 7 years. This includes invoices, bank statements, receipts, vehicle logbooks, and GST returns. Most self-employed people use accounting software like Xero or MYOB to track everything. Good records make filing your IR3 return much easier and reduce the risk of an IRD audit.
IRD-Aligned: Based on 2025 IRD rates and thresholds. For personal advice, speak to a qualified tax agent.
Disclaimer: This calculator provides estimates based on current HMRC rates and thresholds for the 2025/26 tax year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your individual circumstances. Always consult a qualified accountant or tax adviser before making financial decisions. Read our terms
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