Your tax obligations as an independent contractor

The end of March marks the end of the financial year and the time to organise your finances to meet your tax obligations. If you're an independent contractor registered with Mycare, we want to support you to do great work supporting others in your community. So we have compiled the following information to make this process as easy as possible!

Working as an independent contractor means that filling out your tax forms is important. There are aspects of your job that are tax deductible - be sure to claim any deductions you are entitled to, as this will reduce the tax you owe. 

Remember that the Inland Revenue Department (IRD) is always willing to talk you through any queries or issues, especially if you need a hand filling out their forms. 

Mycare makes it easy by deducting 10% schedular payments, which means you do not face a big tax bill at the end of the year. However, it doesn't mean that all your tax obligations have been met and you may need to pay further tax depending on how much you have earned. 

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. If you have registered with the IRD as self-employed they will send you the IR3 form automatically. If not, just call and let them know you are self-employed so they can update your details, and send you the form. The forms will be available for you to fill out from the 7th April and you have until the 7th July to submit them. For more information click here. 

ACC levies
Everyone in New Zealand needs to pay ACC levies; these go towards protecting you if you experience an injury. As an independent contractor you are responsible for paying your own ACC levies. 

You will be invoiced by ACC for a Worker Levy and Working Safe Levy at the beginning of each financial year. The levies are calculated on your earnings for the previous 12 months. 

Workers will not receive an invoice for the first financial year in which they are a contractor, as there is no previous year's income to calculate the levy against. 

For more information on ACC levies and the forms you need to fill out click here.

KiwiSaver
Being your own boss on Mycare means that you are responsible for organising your own KiwiSaver contributions. You will need to find a KiwiSaver provider that you think is the best fit for you and join directly by requesting a product disclosure statement and completing an enrollment form. 

KiwiSaver is very flexible when you are your own boss - you get to choose your own KiwiSaver provider and decide what percentage of your earnings to contribute to your KiwiSaver account. You can pay contributions via lump sum payments or set up a regular payment schedule.

When you're self-employed you enjoy all the benefits of KiwiSaver including being eligible for an annual government tax credit. Click here for further information.

Student Loan
If you have a student loan you are required to pay 12% of your earnings once you earn over the $19,448 per annum threshold. You will need to complete a Student Loan interim payment estimation (SLE3) and send this to the IRD. They will let you know if you have any repayments to make on your student loan. 

Travel and expenses
Over the course of your work you may have been paid for travel and other expenses. You are not required to pay tax on these payments. However, you will need to be able to account for them. When you download a report from your Mycare Payments section, you will be able to click on the various visits to find itemised amounts you have been reimbursed for travel and expenses. You will need to subtract these amounts from your total earnings. For more information on expenses please click here.

If you are uncertain about anything to do with tax give the IRD a call on 0800 227 774 and they will point you in the right direction.

Mycare's Customer Engagement Team is also here to help. Simply call 09 887 9777, or email hello@mycare.co.nz