Contractor / sole trader (self-employed) salary calculator - New Zealand 2026
Free Contractor / sole trader (self-employed) salary calculator for New Zealand (2026). Estimate gross-to-net take-home pay: income tax, social contributions and net salary. Educational, not tax advice.
by Simon Bodych
Methodology & sources
Methodology - New Zealand (2026-27)
Educational model for the tax year 1 April 2026 - 31 March 2027. Not the IRD PAYE deduction tables, not a tax assessment, not tax advice.
Employee (PAYE)
- Personal income tax 2026-27 (unchanged from 2025-26): 10.5% to $15,600, 17.5% to $53,500, 30% to $78,100, 33% to $180,000, 39% above $180,000. There is no tax-free threshold in New Zealand.
- ACC earners' levy: $1.75 per $100 of liable earnings (GST inclusive), capped at maximum liable earnings of $156,641 (maximum levy $2,741.22). Collected through PAYE alongside income tax.
- Independent Earner Tax Credit (IETC): $10 per week ($520 per year) for annual income between $24,000 and $66,000, reduced by 13 cents per $1 above $66,000 and gone at $70,000. The model applies it automatically; in real life it is not available while you receive Working for Families, an income-tested benefit or NZ Super.
- KiwiSaver: the default employee contribution rate is 3.5% from 1 April 2026 (up from 3%). You can choose 4%, 6%, 8% or 10%, apply for a temporary rate reduction to 3%, or not contribute at all. Employee contributions come out of after-tax pay and do not reduce taxable income.
- Employer cost view adds the compulsory employer KiwiSaver contribution of 3.5% (from 1 April 2026) on top of salary while the employee contributes. While the employee is on the temporary rate reduction the employer may lower the contribution to 3% as well; the model uses that 3% compulsory minimum. The employer contribution is subject to ESCT, which is deducted from the contribution itself, so the gross rate is the employer's cost.
- New Zealand has no general social security contribution and no regional or local income tax, so there is no region selector.
- Out of scope: student loan repayments, Working for Families tax credits, secondary tax codes, KiwiSaver government contribution and ESCT mechanics, payroll giving, non-resident rates. New Zealand has no equivalent of a Medicare levy surcharge.
Sources: IRD - Tax rates for individuals, IRD - ACC earners' levy rates, Accident Compensation (Earners' Levy) Regulations 2025, IRD - Independent earner tax credit (IETC), IRD - KiwiSaver changes.
Self-employed (contractor / sole trader)
- Net business income = revenue - expenses, taxed at the same progressive rates as an employee in the IR3 return. The IETC also applies to self-employed income within the $24,000-$70,000 band.
- ACC invoices the self-employed directly for the earners' levy ($1.75 per $100, same cap of $156,641) plus a work levy that depends on the business classification unit (CU). The model uses the 2026-27 average work levy of $0.69 per $100 (Cabinet decision on the average levy rates for 2025/26-2027/28); your actual industry rate can differ significantly.
- Schedular payments: many contractors have withholding tax deducted at source (default rates such as 20%, elective 10% to 100%). This is a prepayment of the same income tax, not an additional tax, so it does not change the annual result.
- Provisional tax: once residual income tax exceeds $5,000 you pay income tax in instalments during the year. A timing rule only; the model shows annual totals.
- KiwiSaver is voluntary for the self-employed (no compulsory employer contribution) and is not modelled.
- Out of scope: GST (15%, registration required once turnover exceeds $60,000 in 12 months), ACC minimum liable earnings for full-time self-employed, ACC CoverPlus Extra, the working safer levy, income-tax deductibility of ACC levies, student loans and Working for Families.
ACC - Understanding levies if you work or own a business, MBIE - Setting the average ACC levy rates for 2025/26, 2026/27 and 2027/28, IRD - Schedular payments, IRD - Provisional tax, IRD - Tax rates for individuals.