Contractor tax set-aside calculator: how much of each invoice to put aside
Put aside the GST, the income tax your year's profit carries less any schedular tax already deducted, ACC's earners' levy and any student loan. On a $4,000 invoice, in a year of $90,000 invoiced and $8,000 expenses with a student loan and 15% schedular tax, that is $1,125.21 of the $4,000 that reaches your bank.
Worked out for the example. Change the boxes to make it yours.
| This invoice, before GST | $4,000.00 |
|---|---|
| GST at 15% | $600.00 |
| Schedular tax deducted at 15% | -$600.00 |
| Paid into your bank | $4,000.00 |
| Put aside: the GST, to pass on | $600.00 |
| Put aside: income tax not covered by the schedular tax ($752.78 less $600.00) | $152.78 |
| Put aside: ACC earners' levy | $63.78 |
| Put aside: student loan | $308.65 |
| Put aside from this invoice | $1,125.21 |
| Yours to spend | $2,874.79 |
| Profit for the year ($90,000 less $8,000 expenses) | $82,000 |
| Income tax on the profit, 2026/27 rates | $16,937.50 |
| ACC earners' levy on $82,000 | $1,435.00 |
| Student loan at 12% | $6,944.64 |
- Income tax, ACC and student loan are worked out for the whole year and shared across your invoices in proportion to their size, so a bigger invoice puts aside more.
- The ACC earners' levy is $1.52 per $100 plus GST ($1.75 with GST) on earnings up to $156,641. ACC invoices it after your tax return, usually in September.
- ACC's work levy for your kind of work is not included: add the rate from your ACC invoice in the last box.
- If your income tax at the end of a year is more than $5,000, you pay provisional tax the year after, in instalments.
Free on every plan. Your account adds this client to Your Timesheets as contract work with your hourly rate, after asking, so the hours behind each invoice are on record. Tax to set aside on every invoice is on the Career and Timesheets plan or On the Move.
What the money has to cover
Four things come out of a contractor's payments later rather than before they arrive. GST, if you are registered, is 15% on top of your invoice and is passed to Inland Revenue with your GST return. Income tax is charged on your profit for the year from 1 April to 31 March, at the 2026/27 rates, together with any salary or wages. ACC's earners' levy is $1.52 per $100 of earnings plus GST, $1.75 with GST, on earnings up to $156,641, and ACC invoices it after your tax return; working more than 30 hours a week, it is charged on at least $50,501. A student loan takes 12% of income over $24,128. Our guide to contractor tax covers each in more detail.
How the calculator shares the year across invoices
Tax is worked out on the year, not the invoice, so the calculator works out the year first: $90,000 invoiced less $8,000 expenses is a profit of $82,000, which carries $16,937.50 of income tax, a $1,435 earners' levy and a $6,944.64 student loan repayment. Each invoice then takes its share in proportion: a $4,000 invoice is 4.44% of the year, so it carries $752.78 of income tax, $63.78 of levy and $308.65 of student loan. If you also have a job, its wages are taxed through PAYE already, but they push your contracting income into higher tax brackets, which is why the calculator asks for them.
Schedular tax already deducted
If your client deducts schedular tax, it is taken from the amount before GST and counts toward your income tax, so only the gap is left to put aside: $752.78 less the $600 deducted is $152.78. Schedular tax does not cover the ACC levy or the student loan, which you still put aside yourself. If the deduction is more than the invoice's share of your tax, the calculator says so: the extra comes back when you file your return, and a lower rate on a new IR330C would deduct less. Our invoice from hours calculator shows the deduction on a whole invoice.
What it leaves out
ACC's work levy depends on your kind of work, so add its rate from your ACC invoice if you know it. Provisional tax is about when you pay, not how much: if your income tax at the end of a year is more than $5,000, you pay the next year's in instalments. The calculator is a guide to the money to keep aside, not a tax return, and an accountant or Inland Revenue's own tools can confirm it for your situation. Our article on side hustle tax covers your first return.
Questions
How much tax should I put aside as a contractor in NZ?
Enough for the GST if you are registered, the income tax on your year's profit less any schedular tax already deducted, ACC's earners' levy and any student loan. For a $82,000 profit with a student loan that is about 28% of what reaches your bank, including the GST.
Does withholding tax cover all my tax as a contractor?
Not always. Schedular tax counts toward your income tax only, at the rate you chose, so it can be too little or too much. ACC invoices its earners' levy to you separately, and a student loan on contracting income is repaid by you, at the end of the year and in interim repayments.
How much is the ACC levy for self-employed people?
For 2026/27 the earners' levy is $1.52 per $100 of earnings plus GST, $1.75 with GST, on earnings up to $156,641. Working more than 30 hours a week, it is charged on at least $50,501. The work levy depends on your kind of work.
Should I put aside GST from every payment?
Yes, if you are registered. The 15% GST on each invoice is passed to Inland Revenue with your next GST return, so moving it to a separate account the day it arrives keeps it safe.
What happens when I save this?
Your account adds the client to Your Timesheets as contract work, with your hourly rate if you gave one, after asking. Logging hours is free on every plan; tax to set aside on every invoice is on the Career and Timesheets plan or On the Move.
Sources
- Accident Compensation (Earners' Levy) Regulations 2025.
- business.govt.nz: ACC levies.
- Goods and Services Tax Act 1985, s 8.
- Income Tax Act 2007, s RD 10.
- Inland Revenue: ACC earners' levy rates.
- Inland Revenue: provisional tax.
- Inland Revenue: repaying my student loan when I am self-employed or earn other income.
- Inland Revenue: tax rates for individuals.
- Inland Revenue: work out and declare my tax rate for schedular payments.
More free tools: see all the calculators.