As a sole trader, it can be tricky to figure out how much to set aside for your annual tax bill. Most income tax calculators are set up for permanent employees, meaning they aren’t completely accurate when it comes to tax for the self-employed.
That’s why we decided to create our own tax calculator, specifically for sole traders. Enter your:
- sole trader income,
- PAYE income (if applicable),
- tax deductions claimed,
- student loan status,
- KiwiSaver contributions (optional)
and get a rough estimate of what you’ll owe come tax time. Easy!
Ready to find out how much you may owe at the EOFY? Plug your numbers into our simple tax calculator below to get the totals 👇
Sole trader tax calculator FY 2024/25
Disclaimer: Please note the tax rates shown above are an estimate based on the figures you’ve provided and don’t take into account factors such as secondary tax obligations. Once Hnry becomes your tax agent, we can factor these in and ensure you’re always taxed at the correct rate. If you have any questions, please reach out to the team.
💡 This tax calculator is for the 2024/25 financial year, as per Budget 2024. For more context around what’s changed and why, check out our guide to the new tax thresholds.
Key Taxes for the Self-Employed
Income tax
You’re required to pay tax on all your income, whether it comes from a full time job or a self-employed gig. Unlike in other countries, there’s no ‘tax free’ threshold in New Zealand, so you’ll owe income tax from the first dollar you earn.
The IRD calculates your income tax rate by adding up your earnings from all your sources of income (PAYE/salary jobs, self-employed income, investment income etc) and deducting tax according to our progressive tax rate system.
There’s sometimes confusion around tax codes for secondary income, and the amount of tax owed on self-employed earnings – but rest assured, the income tax rates for salaried earners and self-employed individuals are exactly the same.
GST
If you earn over $60,000 in a 12-month period in just self-employed income (i.e. not including any PAYE income), you’ll be required to register for and charge GST.
What this means is that you’ll need to charge customers an additional 15% GST on top of your regular prices. This 15% is then payable to IRD whenever you file your GST returns.
If you make business purchases, the GST on any business purchase will reduce the amount of the GST you’ve collected that will be payable to IRD.
📖 Need to know more? Check out our sole trader guide to GST
ACC levies
On top of income tax, you’ll also need to pay ACC levies on your self-employed income. The exact cost of your ACC levies will depend on the type of work you do.
If you also earn income from a PAYE job, then you’ll already be making ACC contributions as part of your PAYE taxes, and any ACC levies on your self-employed income will be in addition to that.
It’s worth noting that there are annual limits for ACC levies, over which you won’t be required to make any further payments.
💡 For our tax calculator, we’ve assumed an average ACC levy rate. But you may need to set aside more, depending on the type of work you do, and the associated risk.
Student loan
If you currently have a student loan, and you’re earning over the annual threshold of $24,128, you’ll be required to make repayments on that loan at the standard IRD rate of 12%.
This applies to your sole trader income, in addition to any repayments you make from a PAYE salary. There’s no way around it, sorry!
📖 Check out our handy guide to paying off your student loan as a sole trader.
How Hnry Helps
Hnry is an award winning app and tax service, designed specifically for sole traders. For just 1% + GST of your self-employed income, capped at $1500 a year, Hnry will calculate and pay all your taxes, levies and whatnot for you, including:
We also file your annual tax return for you – it’s all part of the service! Better still, using the Hnry platform costs less than using a traditional accountant, and is entirely tax deductible.
If that sounds good to you, join Hnry today and never think about tax again!
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