NZ Self-Employed Income Tax Calculator

Estimate the income tax on sole-trader profit, including any employment income. Compare the tax bill with withholding credits and provisional payments, and budget separately for an ACC invoice.

Updated 2026-10-15 · Inland Revenue rates

Income tax attributable to the business profit$8,721$726.71 a month before tax credits or payments; 2026–27 resident rates

Business profit (losses not modelled)	$55,000
Combined employment + business income tax	$8,721
Estimated residual income tax before provisional payments	$8,721
Estimated tax still to pay	$8,721
Business cash after incremental income tax, before ACC	$46,280
Business cash after your optional ACC reserve	$46,280

The estimated residual income tax exceeds $5,000. If that is your assessed residual tax, provisional tax will generally apply in the following year.

Resident sole-trader income tax only. ACC is invoiced separately and depends on occupation, hours and liable earnings; the optional reserve is your own cash-budget input and is not deducted for income tax here. No losses, IETC, student loans, KiwiSaver, GST liability or family credits are calculated. Tax payments reduce the balance, not the underlying tax bill.

Your result is ready

Estimate sole-trader income tax from profit

The model starts with business revenue minus deductible expenses. Enter GST-exclusive amounts if registered and entitled to recover the associated input GST. It applies resident personal income tax to business profit plus other employment income, then subtracts tax on the employment income alone to show the extra tax attributable to the business.

At the default entries, $70,000 revenue less $15,000 expenses gives $55,000 profit. With no other income or credits, the estimated income tax is $8,721, leaving $46,280 of business profit before ACC, student loans or personal savings. These results come from the 2026–27 resident tax bands.

Tax credits, provisional payments and the amount still to pay

Employment PAYE income tax and schedular withholding are credits against the assessed income tax. Enter income tax only, excluding ACC, KiwiSaver and student loan deductions. The calculator subtracts provisional tax already paid separately when estimating the balance.

Residual income tax and the remaining cash balance are different. Paying provisional tax reduces the amount still payable; it does not make the underlying residual income tax disappear. The result therefore displays both numbers instead of testing the provisional-tax threshold against a balance that has already been reduced by instalments.

When provisional tax can apply

Inland Revenue generally requires provisional tax in the next year when the prior assessed residual income tax is more than $5,000. This tool flags that threshold using the estimated residual amount. It does not decide whether you are already a provisional taxpayer or calculate an instalment schedule.

First-year business income, different calculation methods, withholding and changes in profit can affect payments and interest. Use the provisional-tax guide and myIR for your assessed position, due dates and any instalments. An estimate for the current year is not a substitute for last year’s assessment.

Why ACC is a separate budget item

ACC calculates self-employed levies using factors including liable earnings, cover type and classification unit. It is not simply the employee Earners’ levy percentage applied to profit. The calculator therefore does not label a wage-based ACC estimate as your business invoice.

If you have an invoice or a separately prepared estimate, enter its cash amount in the optional reserve field. That reserve reduces the displayed cash budget but is not automatically deducted as a tax expense: the tax treatment of the invoice components must be considered separately.

What the estimate leaves out

The model excludes business loss offsets, the independent earner tax credit, Working for Families, student loans, KiwiSaver and GST payable. Expenses greater than revenue are shown as zero profit, with a message explaining that losses are outside scope.

Use PAYE tools for wage deductions and the GST calculator for adding or removing GST from a price. Those tools answer different questions. This calculator estimates resident sole-trader income tax and tax-payment budgeting; it does not model company tax or a complete IR3 return.

Frequently asked questions

Is income tax based on revenue or profit?

This model applies income tax to profit after the entered deductible expenses, combined with any other employment income. GST and expense eligibility must be handled correctly before entering the figures.

Does provisional tax increase my annual tax bill?

It is a way of paying income tax during the year. The payments reduce the final balance; they are not an additional tax on top of the annual income tax calculated here.

Sources

Figures are taken from official government publications and were last reviewed on 2026-10-15.

Reviewed by Kashif Nazir Khan on 2026-10-15 · software engineer and developer with an interest in accounting and taxation