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You may need to deduct tax from payments you make to non-resident contractors and pay it to Inland Revenue.

A non-resident contractor is a non-resident person, company or entity contracted to provide services, the use of another person’s services, or the use of equipment in New Zealand.

Non-resident employees and non-resident entertainers, which includes sportspeople, are not non-resident contractors.

If the contractor provides their services from outside New Zealand and does not have any presence in New Zealand, they are not a non-resident contractor.

Exemptions from deducting tax

You do not need to withhold tax if the non-resident contractor:

  • provides you with a valid certificate of exemption (the exemption must be valid for the time period you’ll pay the contractor in)
  • will get payments for their services of $15,000 or less in a 12-month period (this includes payments they get from other contract payers)
  • will be in New Zealand for less than 92 days in total in any 12-month period and does not have to pay tax in New Zealand under a double tax agreement. 

COVID-19 Tax residency

Deducting tax from payments to non-resident contractors

Our IR335 Employer’s guide explains your obligations if you need to withhold tax from a payment made to a non-resident contractor. These are known as schedular payments. Penalties may apply if you fail to meet your obligations.


In brief though, some non-resident contractors will provide you with a tailored tax rate certificate obtained from Inland Revenue specifying the rate to deduct.

In other cases, a contractor should provide you with a completed IR330C – Tax rate notification. If they do not, you must use the no-notification rate on page 3 of the form.

Page 3 also lists the rates to use where you do receive an IR330C. You should use the rate applicable to the services being performed. If none of the specific rates apply, use the default rate of 15%.

A detailed discussion of interpretative issues and practical matters can be found in Tax Information Bulletin Vol 22, No. 7 - Aug 2010 under:

  • 'Interpretation Statements - IS 10/04: Non-resident contractor schedular payments' on page 29.

Tax Information Bulletin - Vol 22 No 7 - August 2010

Contact us

If you have any questions, you can contact us by phone, email or post at:

+64 4 890 3056

[email protected]

Inland Revenue
Non-resident Contractors Team
PO Box 2198
Wellington 6140
New Zealand

Last updated: 28 Apr 2021
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