Essential Information for Tradies
Essential Information for Tradies in New Zealand | NCTBK
As a tradie in New Zealand, it’s essential to understand the different tax types that apply to your business. Here’s a breakdown of the key taxes you need to know about to keep your business on track.
TAX TYPE
DESCRIPTION AND REQUIREMENTS
Income Tax
All tradies operating as a sole trader, partnership, or company are required to pay income tax on their profits. The amount of tax you pay depends on your income level and the structure of your business.
Goods and Services Tax
If your annual turnover is over $60,000, you must register for GST. This is a 15% tax on goods and services you provide, which you must charge to your clients and then pass on to the Inland Revenue Department (IRD).
PAYE
If you have employees, you are required to deduct and pay their PAYE (pay as you earn) taxes on their behalf. This includes their income tax and any other deductions such as KiwiSaver contributions.
Fringe Benefit Tax
If you provide your employees with non-cash benefits such as a company car or health insurance, you may be required to pay FBT.
ACC Levies
All tradies are required to pay ACC (Accident Compensation Corporation) levies to cover the costs of any work-related injuries. The amount you pay depends on your level of risk.
Remember to keep accurate records of your income and expenses, as well as to file your taxes on time to avoid penalties. Working with a tax professional can help ensure you stay compliant with all tax obligations. Understanding and staying on top of your tax obligations is essential for the success of your business. By keeping these tax types in mind and working with a tax expert, you can ensure that your business stays on track financially while remaining compliant with New Zealand tax laws.
