Sole Trader Tax Calculator NZ: Worked Examples for 2026–27

Short answer: A sole trader in New Zealand pays income tax on net profit at the personal brackets (10.5% to 39%), less the independent earner tax credit if eligible, plus ACC levies. On 2027 tax year rates, $40,000 of profit costs about $6,125 in income tax and ACC earners’ and Working Safer levies, $60,000 about $10,806, and $90,000 about $21,235, before your industry’s ACC work levy. That is roughly 15%, 18% and 24% of profit, so setting aside 18%, 22% and 27% of each payment (after any GST) covers it with a margin.

There is no interactive calculator on this page; the sums are short enough to do by hand. The figures use the income tax brackets in force from 1 April 2025, which apply to the whole 2027 tax year (1 April 2026 – 31 March 2027), and ACC’s 2026–27 levy rates. They assume one sole trader with a 31 March balance date and no other income. The bracket detail is in NZ tax brackets for the self-employed and the levies in ACC levies for the self-employed; the New Zealand guides hub has the rest of the series.

How do I calculate tax as a sole trader in NZ?

Work out your profit, apply the brackets, take off any tax credits, then add ACC. In five steps:

1. Profit. Business income (excluding any GST you charged) minus deductible expenses. This is the number every other step uses; see self-employed expenses and receipts for what counts.
2. Income tax. Apply Inland Revenue’s tax rates for individuals: 10.5% up to $15,600, 17.5% to $53,500, 30% to $78,100, 33% to $180,000 and 39% above.
3. Tax credits. If your income is between $24,000 and $70,000, you may get the independent earner tax credit (IETC): $520 a year up to $66,000, reducing by 13 cents for every dollar above that. Self-employment income qualifies, but you cannot get it if you receive Working for Families, a main benefit or NZ Super. Self-employed people claim it in their tax return.
4. ACC levies. The earners’ levy for 2026–27 is $1.75 per $100 of liable earnings including GST, according to Inland Revenue’s ACC earners’ levy rates. ACC’s Levy Guidebook 2026/27 adds a Working Safer levy of $0.08 per $100 before GST, and a work levy that depends on your industry’s classification unit.
5. Credits already paid. Subtract any schedular withholding tax clients deducted and any provisional tax you paid during the year. What is left is your bill.

How much tax do I pay on $40,000, $60,000 and $90,000?

Here is the arithmetic for the 2027 tax year, assuming you qualify for the IETC where your income allows it and that ACC levies you on actual earnings.

Net profit	$40,000	$60,000	$90,000
Income tax on the brackets	$5,908.00	$10,220.50	$19,577.50
Less IETC	−$520.00	−$520.00	$0 (income over $70,000)
Income tax to pay	$5,388.00	$9,700.50	$19,577.50
ACC earners’ levy ($1.75 per $100)	$700.00	$1,050.00	$1,575.00
ACC Working Safer levy ($0.08 per $100 + GST)	$36.80	$55.20	$82.80
Total before work levy	$6,124.80	$10,805.70	$21,235.30
Share of profit	15.3%	18.0%	23.6%
Monthly equivalent	$510.40	$900.48	$1,769.61

Take the $60,000 line: $1,638 on the first $15,600 at 10.5%, $6,632.50 on the next $37,900 at 17.5% and $1,950 on the last $6,500 at 30% give $10,220.50, and the IETC brings it to $9,700.50. ACC adds 600 × $1.75 for the earners’ levy and 600 × $0.08 plus GST for Working Safer.

Three adjustments to make for your own numbers:

• Add your work levy. It is a rate per $100 of liable earnings set by your classification unit, listed in ACC’s levy guidebook. ACC’s online CoverPlus levy calculator works it out for your industry.
• Full-time on low earnings? ACC treats you as full-time if you average more than 30 hours a week. A full-time sole trader earning under $50,501 in 2026–27 is levied on that minimum, so the $40,000 example’s earners’ levy would be about $884 instead of $700.
• No IETC? If you receive Working for Families, a benefit or NZ Super, add $520 back to the $40,000 and $60,000 columns.

Why don’t PAYE and IRD tax calculators fit self-employed income?

Most “tax calculator NZ” results are PAYE calculators: they take a salary, apply a tax code and show take-home pay. That breaks for a sole trader in four ways.

• They tax gross pay, not profit. Type in your turnover and it taxes money you spent on materials, fuel and tools.
• They deduct ACC the employee way. A PAYE calculator takes the earners’ levy off every pay. You are levied on liable earnings after expenses, you also pay the work and Working Safer levies, and ACC invoices you after your IR3, not as you go.
• They do not handle contractor income. Inland Revenue says its own PAYE calculator does not allow for schedular payments, tailored tax codes or lump sums.
• They assume tax is already paid. Nobody withholds yours, so a take-home figure tells you nothing about the bill coming after the year ends.

Inland Revenue’s yearly calculator, work out tax on your yearly income, is closer: give it your profit and it returns the bracket tax for the year. Inland Revenue notes it does not include tax credits such as the IETC, and it does not include ACC, so treat its answer as the first line of the table above.

How much of each invoice should I set aside for tax?

Take any GST out of each payment first, then set aside a fixed percentage of what is left. Base the percentage on the profit you expect, and round up to cover your work levy and a better year than planned.

Expected profit	Tax and ACC before work levy	Suggested set-aside
$40,000	15.3%	18%
$60,000	18.0%	22%
$90,000	23.6%	27%

Because you are taxed on profit rather than income, applying the percentage to every payment builds in a cushion when you have expenses.

GST-registered example. An electrician expecting about $90,000 of profit is paid an invoice of $3,450 including GST. The GST is $3,450 × 3 ÷ 23 = $450, which goes into the GST account untouched. Of the remaining $3,000, 27% is $810 for income tax and ACC. That leaves $2,190 to spend. The GST calculation guide explains the 3/23 step.

Not registered. A designer expecting $40,000 of profit, with turnover below the $60,000 GST threshold, is paid $1,200. There is no GST to remove, so 18% is $216 set aside.

What if I earn more than I expected?

Every extra dollar is taxed at your marginal rate, not your average, so income above your estimate needs a bigger slice. On 2026–27 rates, before the work levy:

Profit band	Income tax	Earners’ + Working Safer levy	On each extra dollar
$15,601 – $53,500	17.5%	1.84%	about 19.3%
$53,501 – $78,100	30%	1.84%	about 31.8%
$78,101 – $156,641	33%	1.84%	about 34.8%

One trap sits inside the 30% band. Between $66,000 and $70,000, the IETC shrinks by 13 cents per dollar, so if you were getting it, each extra dollar there costs about 44.8% until the credit is gone. Above $156,641, ACC’s maximum liable earnings for 2026–27, the earners’ levy stops rising.

When do I actually pay the tax?

Later than you earn it, which is why the set-aside matters. In your first year you file an IR3 after 31 March and pay the year’s income tax as terminal tax by the 7 February after the tax year ends, or 7 April if you have a tax agent with an extension of time, according to Inland Revenue’s timelines at the end of the tax year. ACC invoices its levies after you file, usually around September.

If your residual income tax in a return is more than $5,000, you become a provisional taxpayer for the following year. All three examples above cross that line. You then pay the next year’s tax in instalments while still settling the last one, which is the second-year cash squeeze provisional tax in NZ explains, along with the standard option’s “last year plus 5%” rule.

Getting the profit figure right, and where does Keel fit?

Every line above starts from profit, and profit is only as accurate as your invoices and expenses. A lost receipt is a deduction you miss, at your marginal rate plus ACC.

Keel: Invoice Maker & Receipts, an iPhone app by Ilura Technology OÜ, keeps those records. You create quotes that become invoices in one tap, send PDF invoices, capture receipts and expenses, log business mileage, and keep each under its job and customer. “Who owes you” lists unpaid invoices and prepares reminder drafts that you review and send yourself; nothing goes out automatically. Records stay on your iPhone: no account, no bank connection, no cloud sync, and the App Store privacy label reads “Data Not Collected”.

Keel does not calculate your New Zealand income tax or ACC levies, file your IR3 or connect to Inland Revenue or ACC. It is free with no invoice limit (free invoices carry a small “Made with Keel” footer), and Keel Lifetime is a one-time purchase of $249.99 USD (the App Store shows your local price) that adds custom branding, signature, premium templates and accountant-ready exports and reports. Keel on the App Store.

Frequently asked questions

How much tax does a sole trader pay in NZ? A sole trader pays income tax on net profit at the personal brackets, from 10.5% to 39%, less any tax credits, plus ACC levies on liable earnings. On 2027 tax year rates, income tax and the ACC earners’ and Working Safer levies come to about 15% of profit at $40,000, 18% at $60,000 and 24% at $90,000, before the work levy for your industry.

How much tax do I pay on $60,000 of self-employed income in NZ? Bracket tax on $60,000 of profit is $10,220.50, or $9,700.50 after the $520 independent earner tax credit if you are eligible. ACC adds about $1,050 in earners’ levy and $55 in Working Safer levy for 2026–27, plus your work levy. That is around $10,800 in total, or 18% of profit.

Is there an IRD tax calculator for self-employed people? Inland Revenue’s yearly income tax calculator works out the bracket tax on any annual income you enter, so you can give it your profit. It does not include tax credits such as the IETC or ACC levies. Its PAYE calculator is for wages and does not allow for schedular payments, so it is the wrong tool for business income.

How much should a sole trader put aside for tax in NZ? Take any GST out of each payment first, then set aside a percentage based on your expected profit: about 18% at $40,000, 22% at $60,000 and 27% at $90,000. Those figures include income tax, the ACC earners’ and Working Safer levies, and a margin for the work levy. For income above your estimate, set aside your marginal rate instead.

Can a sole trader get a tax refund in NZ? Yes, if the tax already paid for the year is more than the tax on your return. That happens when clients deducted schedular withholding tax at a higher rate than you needed, or when your provisional tax instalments were more than the final bill. Inland Revenue works out the refund once you file your IR3.

Do sole traders get the independent earner tax credit? Yes, if eligible. Self-employment income counts, and the credit is $520 a year for income between $24,000 and $66,000, reducing by 13 cents per dollar up to $70,000. You cannot get it if you or your partner receive Working for Families, or you receive a main benefit or NZ Super. Self-employed people claim it in their tax return.

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This article is general information, not tax advice. Consult a qualified New Zealand tax professional.