Make a payment

Paying a non-resident contractor or entertainer

Non-resident contractor's tax obligations as an employer

As a non-resident contractor your tax obligations as an employer are outlined in this section.

Find out more about non-resident contractor's tax obligations as an employer

Paying non-resident contractors

A person, company or other entity who isn't a tax resident in New Zealand, and who has a contract, agreement or arrangement to perform a contract activity in this country, is classified as a non-resident contractor.

Some non-resident contractors fail to declare their New Zealand income and meet the PAYE requirements for their employees. Their employees also evade their tax obligations by not declaring their New Zealand income.

Any organisation in New Zealand that engages a non-resident contractor is required to deduct non-resident contractor's tax from the contract payments, unless the non-resident contractor provides an exemption certificate from us.

The tax consequences of failure to deduct this tax could substantially increase the costs to the organisation of engaging with the non-resident contractor.

What we are doing

  • We have been working closely with key agencies to help industries and non-residents understand what they need to do to comply with their tax obligations.
  • Our goal is to ensure all non-resident contractors and contract payers understand the tax requirements and what happens if they don't comply.
  • We are continuing to assess the level of non-compliance in the New Zealand business community and proactively seek ways to identify non-resident entities contracting in New Zealand.
  • We have an ongoing focus on the Christchurch rebuild.

Getting it right

A map of New Zealand with a tick next to it

If you engage non-resident entities or individuals to undertake contract activities in New Zealand, you must:

  • deduct non-resident contractor's tax (NRCT) from payments to non-residents, unless they have an exemption certificate.
  • make sure they are aware of their New Zealand tax obligations.

Accounting for tax on schedular payments

Non-resident contractors' tax (NRCT) is withheld from each contract payment made to the non-resident contractor at the standard or special tax rate. Payers must ensure that they hold a completed Tax rate notification for contractors IR330C on the non-resident contractor's behalf.

When the payer does not hold a completed IR330C, tax must be deducted, under section RD 10B(2) of the Income Tax Act 2007 (the Act), at the no-notification rate of 45 cents for each dollar for non-resident individual contractors, or 20 cents for each dollar for non-resident contractor companies.

Find out more about accounting for tax on schedular payments

Deducting tax from schedular payments for non-resident contractors

If you are a non-resident contractor and work, lease or rent equipment you will have tax deducted from schedular payments income that is earned in New Zealand. Unless you hold a valid certificate of exemption from non-resident contractors' tax (NRCT) at the time payment is made, the payer must deduct tax from it.

Find out more about deducting tax from schedular payments

Deducting tax from schedular payments for non-resident entertainers and sportspeople

If you are an entertainer performing in New Zealand, you are subject to tax on schedular payments of 20 cents in each dollar paid to you or any other person on your behalf. It does not matter whether you are an individual, company or other entity.

Find out more about schedular payments for non-resident entertainers and sportspeople