When you’re busy on the tools as a sole trader or contractor, tax time can be one of the first things to go into the too-hard basket. But a bit of know-how on your tax obligations can save you a ton of stress down the track and help you to better manage your hard-earned cash.

What are my core tax obligations as a tradie?

Income Tax (IR3)

As a tradie operating on your own, you file an IR3 individual income tax return once a year. This covers all the income you’ve earned (including all contract work, cash jobs or payments from multiple clients) and lets you claim business expenses that reduce your taxable income.

GST (Goods and Services Tax)

If your turnover (total income) is $60,000 or more in any 12-month period, you must register for GST, charge 15% on your invoices, file GST returns and pay GST to Inland Revenue (IRD). You can claim back the GST you’ve paid on business purchases like tools, materials and services.

If you’re registered for GST, GST returns are paid regularly throughout the year, depending on the filing frequency you chose when you registered.

ACC Levies

ACC levies are based on your earnings and work type. These are separate from income tax, and you’ll receive your annual ACC invoice after you file your tax return.

Provisional Tax

If you end up paying more than $5000 tax at the end of a year, you’ll usually be asked to pay provisional tax the following year. That means you pay parts of your expected tax bill in installments rather than one lump sum at the end.

When are the important tax dates?

1 April–31 March: This is the financial year for most Kiwi businesses, sole traders and contractors.

7 July: This is the deadline to file your IR3 tax return if you file it yourself via myIR.

Dates differ if you use an accountant, but keep in mind there are also provisional tax instalment dates throughout the year if you’re paying tax in advance, as well as GST payments if you’re GST registered.

Frequently asked questions about tax

Do I really need to file a tax return?

Short answer: yes. If you’re self-employed, a sole trader or contractor, all income you earn counts, whether paid digitally, via cash or otherwise. IRD requires you to report all income on your IR3 tax return.

Do I need to keep all receipts?

Yes. You need to keep records of income and expenses, including receipts, invoices and bank statements. This helps you to keep on top of your numbers, and is essential when claiming business expenses. Digital copies are fine, and the IRD advises you hold on to records for at least seven years.

What if I work some jobs as a contractor through an agency?

What if I employ permanent staff, how does that change things?

If you employ staff, there’s a range of extra things you need to look after on their behalf, including PAYE and KiwiSaver contributions for eligible employees. Employees complete a tax code declaration (IR330) when they start, which tells you how much tax to deduct.

Yes, it can get complicated, so choosing a good software system is a must, says chartered accountant Dylan Guitry from Wellington’s Affinity Accounting. “Having a PAYE intermediary payroll system in place means you pay your employer tax (or PAYE) as you go, rather than having a monthly PAYE bill to catch up on. This is really important as PAYE is one of the worst types of tax to fall behind on, with the potential for heavy criminal charges if it’s not dealt with properly.”

What if I employ casual labour?

Planning on getting your nephew to help you over his uni holidays? Tax still needs to be paid on their wages, says Dylan. “If you’re already an employer, it will be easy to add them into your payroll system. This is the method we prefer, but if you don’t have a payroll system in place, they can invoice you with hours worked and the agreed rate as an independent contractor. Note that it’s their responsibility to pay their tax on their income though.”

This sounds like a lot. How do I get help with tax?

It’s a myth that you need to be running a big corporate business to get expert advice. Accountants are available to help with businesses of all types and sizes, and many are experts in helping tradies. Seeing an accountant early on can really pay off down the track.

Using software like Xero, Hnry or MYOB can also take a lot of the stress out of business admin and tax.

What happens if I get it wrong?

If you miss deadlines or underpay tax, IRD may charge penalties or interest. If you have trouble paying, IRD often offers payment plans or instalment arrangements, but it’s best to contact them early and not let issues snowball.

Helpful resources to make tax time easier:

• IRD Tax Toolbox – general tax guidance for tradies.

• IRD Self-Employed Overview – what you need to know if you’re self-employed.

• Sole trader checklist – top tips and annual must-dos.

• GST guide – step-by-step info to get the gist on GST.

• Tips for tradies – short videos on how to improve your business processes.

*This information is for general guidance only. It should not be used as a substitute for legal, business, accounting, or other professional advice.

April 2026