InvioInvio
Free Tax Tool - 2025-26

NZ Income Tax CalculatorSole Trader Tax and Set-Aside Estimator

Find out exactly how much income tax and ACC levy you owe, and the precise percentage to set aside from every invoice - so there are no surprises at tax time.

Who is this for?

NZ sole traders, freelancers, contractors, and self-employed people who have no employer withholding tax for them.

What does it calculate?

2025-26 income tax across all five NZ brackets, ACC earners levy (1.67%), your effective rate, and a per-$100-invoiced set-aside figure.

What it does not include

Student loan, KiwiSaver, IETC, Working for Families, or other PAYE income. Single self-employed income only in v1.

NZ Income Tax and Set-Aside Calculator

2025-26 tax year - sole trader / self-employed

Expenses are always entered as an annual figure, regardless of the income period selected above.

Enter your income above to see your set-aside estimate.

Tax Guide

How Tax Works for NZ Sole Traders

Income tax brackets (2025-26 tax year)

NZ uses a progressive tax system - each dollar in a bracket is taxed at that bracket's rate, not your whole income. The table below shows the 2025-26 rates for resident individuals.

Taxable income (annual)Marginal rate
$0 to $15,60010.5%
$15,601 to $53,50017.5%
$53,501 to $78,10030%
$78,101 to $180,00033%
Over $180,00039%

ACC earners levy

On top of income tax, sole traders pay the ACC earners levy - currently 1.67% of net taxable income for 2025-26, capped at a maximum liable income of $152,790 (maximum levy: approximately $2,552). This is not withheld by anyone - it is part of your annual tax bill.

GST threshold: $60,000 turnover

GST is a separate obligation from income tax. If your turnover (total invoiced, not profit) exceeds $60,000 in any 12-month period you must register for GST with IRD. You then collect 15% GST on your sales and can claim GST on business expenses. The GST you collect is not your income - do not mix it with your income tax set-aside.

Why the set-aside percentage matters

Unlike PAYE employees, no one deducts tax for you before you get paid. Every invoice you receive is gross - you owe the tax portion to IRD at end of year (or quarterly via provisional tax). The simplest habit: open a second bank account labelled "Tax savings" and transfer the set-aside percentage every time you receive a payment. You will never scramble for cash at tax time.

Left Hnry? Here is how to do this yourself.

Hnry calculated your tax automatically and swept a percentage from every payment before forwarding the rest to you. Now that you are off Hnry, this calculator replaces that estimate. Enter your expected income, note the set-aside rate, and move that percentage to your tax savings account manually after each invoice payment. You keep more of your money on a flat-rate invoicing tool, and you stay in full control.

Want a deeper dive on sole trader tax deductions? Sole Trader Tax NZ Guide covers claimable expenses, provisional tax, and how to prepare for your IR3. If you need to calculate GST on your invoices, use our GST Calculator for exact add/subtract figures.

Comparing your options after leaving Hnry? Invio vs Hnry shows the cost difference, or read our upcoming Leaving Hnry guide for a step-by-step transition checklist.

FAQ

Frequently Asked Questions

How much tax should I set aside as a sole trader in NZ?
A common rule of thumb is to set aside 20-25% of every invoice you receive. The exact amount depends on your income level and expenses. On a net taxable income of $50,000 you owe roughly 17% in combined income tax and ACC levy. On $80,000 it is closer to 22%, and on $150,000 around 28%. Use the calculator above to get the precise figure for your situation, then move that percentage into a dedicated tax savings account each time you get paid.
What is the ACC earners levy and do sole traders pay it?
Yes. The ACC earners levy covers the cost of treatment for accidents. For the 2025-26 year the rate is 1.67% of your liable income, up to a maximum liable income of $152,790 (so the maximum levy is around $2,552). As a sole trader you pay it as part of your provisional tax or end-of-year assessment - it is not withheld by an employer. The calculator above includes ACC in the total set-aside figure.
Do I need to register for GST as a sole trader in NZ?
You must register for GST if your turnover (total sales, not profit) exceeds $60,000 in any 12-month period. The calculator will show a warning if your gross income exceeds this threshold. GST is separate from income tax - it is a 15% tax you collect on behalf of IRD and pass on after deducting GST paid on your own expenses. See our GST Calculator for help with the numbers.
How is self-employed tax different from PAYE?
PAYE (Pay As You Earn) is deducted automatically by your employer before you receive your pay. As a sole trader there is no employer - nobody withholds tax for you. You are responsible for setting money aside yourself and paying it to IRD either as provisional tax (three instalments during the year, if your residual income tax is over $5,000) or as a lump sum when you file your IR3 return after 31 March. Getting the set-aside amount right from day one prevents a painful end-of-year bill.
Does Invio calculate or file my tax?
No - Invio is not a tax filer. Invio is invoicing software: it helps you send professional invoices, track what clients owe you, and get paid faster. An Owner money summary that shows your income totals is on the roadmap, but filing your IR3 or provisional tax must be done through IRD myIR or with an accountant. This calculator is a free estimation tool to help you plan your set-aside - it is not tax advice.
What is provisional tax and when do I pay it?
If your residual income tax (RIT) for the year is more than $5,000, IRD requires you to pay provisional tax in instalments during the year rather than as one end-of-year payment. Under the standard method there are typically three instalment dates. If you are new to self-employment and expect a tax bill above $5,000, ask your accountant to set up provisional tax payments - it prevents the shock of a large bill plus use-of-money interest.
Get Started

Invio tracks what you earn so you always know your set-aside

Send invoices in seconds, track what clients owe, and know exactly what hit your account - so your tax set-aside is never a guess.

Free plan - no credit card required - takes 60 seconds to send your first invoice