Driving for delivery and ride-share apps in New Zealand: tax, GST and your real hourly earnings

Self-employed or employee: the court case and the gateway test

Whether a driver is an employee has been tested in court. On 17 November 2025 the Supreme Court dismissed the platform companies' appeal in Rasier Operations BV v E Tū Inc [2025] NZSC 162, a case about whether four ride-share drivers were employees under section 6 of the Employment Relations Act 2000. The court answered that question for those four drivers. It did not turn every driver on every app into an employee.

Then the law changed. From 21 February 2026, section 6 excludes a "specified contractor" from being an employee. The definition covers work done for a third party that another business facilitates, which is how an app works, and it has five parts. All five must be met:

• a written agreement says you are an independent contractor, or not an employee;
• you are free to work for others, such as another app, except while doing this work;
• you are not required to work, or be available, at set times, on set days or for a minimum period, or you may subcontract the work;
• you cannot be dropped for turning down extra work beyond what you agreed to;
• you had a reasonable chance to get independent advice before you signed up.

If you met all five on 21 February 2026 under an arrangement made earlier, you are a specified contractor from that date, unless proceedings about your status had already been brought. If any part is not met, the older test of the real nature of the relationship still applies. Our article on the gateway test and contractor hours explains how the two tests fit, and Employment New Zealand can help with your own case. The rest of this article assumes you are a contractor, which is how the apps treat their drivers for tax.

Marketplace GST since 1 April 2024, and when registering is better

Ride-sharing and food or beverage delivery sold through an app are "listed services" under section 8C of the Goods and Services Tax Act 1985. The app, as the marketplace, collects GST at 15% on the job. What happens next depends on you:

• Not registered. The app pays 6.5% to Inland Revenue and passes 8.5% to you as a flat-rate credit, meant to cover the GST in your costs. It must give you a statement of those credits at least once a month. Inland Revenue says you can choose whether to count the credit as income in your tax return.
• Registered. Your service to the app is zero-rated, so you owe no GST on those fares, and you claim the GST in your costs to the extent they relate to the driving: fuel, tolls, parking, registration, insurance, the app's fees and the vehicle itself. Tell the app you are registered. If it keeps paying you flat-rate credits, you must pay them back in your GST return.

You may read that ride-share drivers must register for GST whatever they earn. Inland Revenue's page for drivers applies the same test as any business: you must register once you have earned, or will earn, more than $60,000 in 12 months from all your taxable activities, counting gross fares and delivery fees. Below that, registering is a choice.

A rough guide to the choice: GST is 3/23 of a GST-inclusive cost, and that only beats the 8.5% credit when your business costs, GST included, come to more than about 65% of your fares. That is most likely in a year you buy a car for the work. Registering also brings GST returns to file, and GST on any work you do outside the apps. Our article on side hustle tax covers GST for app and marketplace work in general.

Vehicle costs: kilometre rates, a logbook and the business share

The car is your biggest cost, and only its business share counts. Inland Revenue sets out the ways to claim it:

• A logbook. Record every trip for 90 days and the business share it shows can be used for three years.
• No logbook. The claim is limited to 25% of running costs, and you may need to justify even that.
• Actual costs, with records of every trip, its distance and its reason.
• Kilometre rates, applied to your business share. They include depreciation, so you do not claim that as well.

Inland Revenue publishes kilometre rates after each income year ends. For 2025-2026, published in July 2026:

Tier 1 covers fixed and running costs, for the business share of the first 14,000 km the car travels in the year, private kilometres included. Tier 2 covers running costs only, for the business share beyond 14,000 km. A full-time driver passes 14,000 km early, so most kilometres are at tier 2. A made-up example: a petrol car travels 20,000 km in the year, and the logbook shows 75% business. That is 10,500 km at $1.20, $12,600, plus 4,500 km at 37 cents, $1,665: $14,265 in all.

Inland Revenue lists what drivers cannot claim: the cost of getting or keeping your licence, fines, and personal costs such as meals bought on a break.

Real hourly earnings: payouts divided by the hours you were signed in

The figure the apps show is pay per trip. The figure that matters is pay per hour you were signed in and available, because the time between jobs is part of the work and is not paid. A made-up week:

Per trip hour, this week looks like $44 an hour. Per hour signed in, after running costs, it is $20.10, and that is before insurance, registration and the car's loss in value, which tier 2 leaves out, and before income tax and ACC levies. For comparison only, an employee's adult minimum wage is $23.95 an hour from 1 April 2026.

The only way to know your own figure is to count the hours you are signed in, not just the trips. Your Timesheets does that free: start its timer when you sign in to the app and stop it when you sign out, and it carries on if you close the app or your phone locks. At the end of the week, divide what the app paid by those hours.

IR3, provisional tax and the record Inland Revenue expects

You file an IR3 if you received more than $200 before tax that Inland Revenue was not told about, and that includes your driving: fares or delivery fees, tips and bonuses. It is due by 7 July after the tax year ends on 31 March, unless you have a tax agent or an extension of time. Once the tax to pay on a return is more than $5,000, provisional tax starts for the following year. Our guide to contractor tax covers provisional tax, the ACC levies self-employed people pay and student loan repayments.

Inland Revenue will usually know what the apps paid you: since 1 January 2024, online marketplaces resident in New Zealand must collect and report information about sellers who provide relevant services. So keep a record that matches theirs and explains your costs:

• every statement from each app, including the flat-rate credit statements;
• receipts for fuel, servicing, insurance, registration, tolls, parking and your phone;
• a logbook, or a record of each trip's distance and reason;
• the hours you were signed in, week by week.

Set money aside from every payout as it arrives, not in July. If the driving sits on top of a salary, the whole profit is taxed at your top rate.

Know what an hour on the road pays