Learn about sole trader tax rate NZ.

nz property tax

A self-employed person running a sole trader business might need clarification about the Sole Trader tax rate in NZ due to a lack of basic knowledge, resources or experience. If you are a businessperson confused about the tax rate in NZ, this blog post will be ideal for you.

So, read this post carefully!

Who are sole traders?

A sole trader is a business structure under self-employment. Therefore, in this blog post, taxes for sole trader businesses are considered the same as those for self-employment. Generally, this self-employed person can start a new business without legal set-up tasks. However, it depends on several factors like location and business type. 

Why is IRD NZ tax rate knowledge essential for sole traders?

If you are running a sole trader business, your minimal knowledge can be a drawback  in tax concerns. This unawareness will be more impactful if you cannot pay your taxes on time; you must pay penalties and interest charges. In addition to that, IRD tax rate knowledge will be helpful for you in making decisions about your business pricing.

Main taxes for the self-employed

Income tax:

You must pay on a net profit after filing an income tax return. The notable fact mentioned is that you can claim your expenses for business activities.



      From April 1st  2021 Up to 31st March 2021
Tax Rate Tax Rate
$0 – $ 14,000 10.5% 10.5%
$14,001 – $ 48,000 17.5% 17.5%
$48,0001 – $ 70,000 30% 30%
$ 70,001- $80,000 33% 33%
$ 180,000 and above 39%

Source- Inland revenue

GST (Goods and service tax)

Goods and Service Tax means tax amount added to transactions of goods and services. This tax is also applicable to imported goods. So, if you buy or sell goods, you must register for GST tax. Regarding sole traders, If your income exceeds the $ 60,000 income level, you must be registered for GST payments.

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