We believe in looking after everyone on our platform, including our contract workers. We want to support you to do great work supporting others in your community.
Mycare worked with The Inland Revenue Department (IRD) and helped change the rules about how schedular payments (also known as Withholding Tax) can be made as you earn when working as an independent contractor.
When you work as an independent contractor in New Zealand you are required by law to pay tax.
A 10% deduction of tax in the form of a voluntary schedular payment is automatically made for every hour you are booked and paid through Mycare, and Mycare pays this to the IRD on your behalf.
When you find work you will negotiate with the client, or their family, your rate of pay and this will be stated in the agreement. Mycare will deduct 10% (Withholding Tax) on an ongoing basis for the duration of the agreement. You will also pay a small Mycare service fee.
At the end of the financial year, you will need to file an IR3 to make sure you've paid the right amount of tax. You may even get a refund. Have a look at the IRD Help Page here to make sure you get all the deductions you are entitled to.
When filling out your tax return you are able to deduct certain expenses you have incurred in order to earn you income. Deductions will reduce your taxable income before your tax is calculated.
Tax deductions include:
- Work related expenses
- Further education expenses
- The cost of managing your tax (e.g. paying an accountant)
- Charitable donations.
It’s important for this reason to keep track of your business expenses throughout the year. If you are not sure about any expenses talk to your local accountant.