We want to help you earn extra money. It’s important that you understand both your rights and your obligations. Below is a list of Frequently Asked Questions, tips, information and links relating to earning extra income.

Whether you earn your extra income by working for an employer as an employee, by contracting to a company, or by marketing yourself to customers in your community, you must declare your income to the Inland Revenue Department. If you receive support from Work and Income, it is important that you contact your case manager if you have any change in your circumstances.

Disclaimer The content of this document provides general guidance only on some frequently asked questions and is not legal advice. It will not answer every question and should not be used as a substitute for reference to the applicable legislation and/or independent legal advice. Green Sky NZ Ltd takes no responsibility for the results of any decisions made and/or actions taken on the basis of information on this website, or for any errors or omissions.

Did you know?
If you receive Superannuation, you can currently earn unlimited additional income without it affecting your entitlement. Pease speak to your local Work and Income branch

Children under 16 can earn $45 a week ($2,340 a year) tax free. Please click here for more information.

Since April 1st 2009, 16 and 17 year olds working for an employer are entitled to earn the adult minimum wage of $12.50 per hour. Please click here for more information.

If you are on the Domestic Purposes Benefit, you can currently earn $80 a week without the income affecting your benefit. Pease speak to your Work and Income Case Manager

You may be entitled to a Government grant to help you set up your new business. Please click here for more information.

FLEXERS

1. Self Employed/Freelance/Contractors
Many of you will not have previous experience in self employment. Whether you are babysitter or a lawyer, if you are earning income from services you are offering as an individual (i.e. not an employee), you have responsibilities

This section is a guideline which may help answer some of your questions in relation to being or becoming self employed.

If I want to charge someone for my services do I have to be a registered business and have a business IRD number?
No, you can operate as a sole trader, using your personal IRD number without needing to formally set up a company.
Please click here for more information.

I don’t have an IRD number. How do I get one? Please click here for more information.

If I want to charge someone for my services, do I have to be GST registered?
What is GST? GST is the Goods and Services Tax. It is a government tax. GST of 12.5% applies to most goods sold and services supplied in New Zealand.
Businesses which are registered for GST collect this tax on behalf of the government and pay it to the IRD. GST is not a separate tax on your business. Businesses which are not GST registered, do not collect GST for the government and therefore, do not charge their customers GST for their goods or services.

If you earn less than $60,000 a year in your self employed activity, it is not currently compulsory to be GST registered. Please click here for more information.

Here are some reasons why you might want to register for GST:
1. If you have high set-up costs – for example equipment to buy – you can claim back the GST on these purchases if you are GST registered.

2. If you are offering your services to a business or businesses, they may prefer to deal with someone who is GST registered, for their own accounting purposes

3. You may want to portray an image of an established, thriving business (which is likely to earn over $60,000 a year and therefore would need to be GST registered)

Here are some reasons why if you are earning less than $60,000 a year you might choose not to register for GST
1. As you are not GST registered, you will not charge your customers GST and therefore, you can market yourself as being at least 12.5% cheaper than people who are GST registered

2. You do not have to file GST returns


Do I have to keep records as a self employed person?
If you earn income as a self employed person, you must declare your income to Inland Revenue. At the end of your first tax year, you supply a basic Profit and Loss statement which shows your income during the tax year, less any business expenses you wish to claim. You only pay income tax on the profit you made (i.e. the income minus the business expenses).

You therefore must keep track of your income. We have provided you with a basic invoicing template and cashbooks to help you with this. See My Green Sky Accounts Tools You are not obligated to maintain records of your business expenses if you do not wish to claim them. Please click here for more information.

What business or personal expenses are tax deductable?
As self employed people pay income tax only on their net profit (income less business expenses), it is beneficial to understand what expenses you are entitled to claim. You may also be able to claim a percentage of your home and vehicle expenses based on business use. Please click here for more information.

How do I know how much tax I am required to pay on the income I earn from this self employed activity?
In your first year of self employment, you will not know exactly how much income you will earn during the tax year. If you are not registered for GST, IRD will not know that you are earning this income until you file your tax return. During your first year you must budget to set aside the tax you will pay on this income.

In your second year and subsequent years, IRD will assess the likely tax you will owe based on your previous year’s income. This is called Provisional tax. Provisional tax is not a separate tax, it is way of paying the tax you are likely to owe, in smaller amounts through the year in instalments. We recommend that you contact IRD directly and discuss your situation with them. Please click here for more information.

Withholding Tax
Some self employed people who contract or freelance within certain industry categories may have withholding tax (rather than PAYE) deducted from their gross income by the person who contracts them. Click here for more information.

What about ACC?
If you are self-employed you will be invoiced by ACC at the end of the tax year based on the income you have earned and what levies are appropriate to you. The percentage of the ACC premium you pay will be calculated based on the industry in which you work.

As people who earn withholding payments are treated as self-employed by ACC, you will be invoiced by ACC for any levies relating to this work. Please contact ACC directly with any questions you may have. Please click here for more information.

Heath and Safety
If you are self-employed, you are responsible for your own safety as well as other people’s safety at your workplace, regardless of where that is. Even if you take your services to someone’s home, you are responsible for ensuring that all aspects of work-related safety have been ensured. Please click here for more information about your responsibilities

Student loans
Depending on your income, IRD may require you to make repayments against any student loan debt that you may have. Please click here for more information

Kiwisaver
If you are self employed, you may choose to contribute to a Kiwi Saver scheme if you so wish. Please click here for more information.

Paid parental
leave Self-employed workers may be entitled to paid parental leave. Please click for details.

Minimum age
 If you are under 16 and offering your services to someone in your community, Green Sky’s terms and conditions clearly state that parental consent is a requirement for being on the site. We support your right to work but we value your safety and well being. Please speak to your parents/guardian and work out an agreement together

Although there is currently no minimum working age for children in New Zealand, there are some conditions around where, when and how young children can work.

When you're under 16 you're legally required to be at school. This means you can't take a job that involves working during school hours, or at any other time which prevents or interferes with your school attendance. There's no problem with working during the school holidays, or at weekends.

Restricted employment
If you’re under 18 you can’t work in any restricted area of licensed premises (like bars, licensed restaurants or clubs). Some exemptions apply for specific types of work, such as cleaning, serving meals and stocktaking.
If you're under 18 you can't work as a prostitute Please click here for more information.

2. Employment

This section is a guideline which may help answer some of your questions in relation to being or being employed.

Flexible working

The Employment Relations (Flexible Working Arrangements) Amendment Act 2007 was passed in late 2007. The Act provides certain employees with the right to request a variation to their hours of work, days of work, or place of work.

To be eligible for the “right to request” an employee must have the care of any person and have been employed by their employer for 6 months prior to making the request. When making the request, the employee must explain how the variation will help the employee provide better care for the person concerned.

The Act requires employers to consider the request for flexible working arrangements and provides the only grounds upon which they can refuse a request. The Act also provides a process for how requests are to be made and responded to.

For more information, please click here. 

PAYE
PAYE stands for Pay as you earn. It is the tax deducted by employers from their employees’ wages or salary. It is the employee’s responsibility to supply the correct tax code to their employer.

Secondary tax
If you take on additional work with a new employer, you need to be sure that the correct tax code is lodged with Inland Revenue. Please click here for more information.

Withholding Tax
Some people who work for organisations on a contract or freelance basis within certain industry categories may have withholding tax (rather than PAYE) deducted from their gross income by the person who contracts them. Click here for more information.

Kiwisaver
Currently, if you start new employment, the employer is required to deduct Kiwi Saver from your first pay. You have between two and eight weeks to elect to opt out of this saving’s scheme. Please click here for more information.

Paid parental leave
If you are unsure about whether you may be entitled to paid parental leave, please click here for more information.

Children and Young People
Although there is currently no minimum working age for children in New Zealand, there are some conditions around the employment of children.
When you're under 16 you're legally required to be at school. This means you can't take a job that involves working during school hours, or at any other time which prevents or interferes with your school attendance. There's no problem with working during the school holidays, or at weekends.

Restricted employment
If you’re under 18 you can’t work in any restricted area of licensed premises (like bars, licensed restaurants or clubs). Some exemptions apply for specific types of work, such as cleaning, serving meals and stocktaking.
If you're under 18 you can't work as a prostitute Please click here for more information.

Employment Rights
It is important that young people understand their employment rights. Please click here for more information.
For information on age restrictions relating to safety of young people in the workplace, please click here.

Minimum wage
The statutory minimum hourly wage rates (before tax) that apply to all employees aged 16 and over are:
For all new entrants and employees on the minimum training wage - $10.00 per hour
For all other employees aged 16 or more - $12.50 per hour
For further information and to see the definition of new entrants and employees on the minimum training wage, please click here.

Pay Equity
Pay and employment equity exists when employees’ pay and work experiences are not affected by gender. Pay and employment equity is about ensuring that pay, conditions, access to the full range of jobs at all levels of the workplace, and experiences in the workplace, are not affected by gender.
http://www.dol.govt.nz/services/PayAndEmploymentEquity/index.asp

Migrants, Residents and Vistors to New Zealand
If you want to offer a job to a foreign national in New Zealand you must check that they are legally able to work here. Currently, citizens of New Zealand (including the Cook Islands, Niue and Tokelau) and Australia do not need a work permit to legally work here.

Residents of New Zealand and Australia do not need a work permit to legally work here.

A New Zealand passport, birth certificate, citizenship certificate, or Residence permit shows that a person is able to work here. An Australian passport, Australian Permanent Residence Visa or Australian Resident Return Visa is also proof that they are able to work here.

Please click here for more information.


Skilled migrants

If you’ve got the skills we need and want to make New Zealand your long-term destination, our Skilled Migrant Category (SMC) offers you the opportunity to move to New Zealand to work and live permanently. Please click here for more information.

Working towards residency in New Zealand

Working temporarily in New Zealand can be used as a step towards gaining residence and settling here permanently. If your talents are needed by New Zealand employers, or you have exceptional talent in the arts, culture or sports, you can apply to work in New Zealand under our Work to Residence category. Please click here for more information.

Relocating to New Zealand with your employer
If you are a key employee of a business that wants to relocate its operations to New Zealand, you may be eligible to apply for residence undYour application for residence must first meet requirements for approval in principle, and you will be invited to apply for a temporary work visa or permit that allows you to come to New Zealand to make the relocation arrangements. Please click here for more information.

Working temporarily in New Zealand

You may be eligible for a temporary work visa and/or permit if:
You have a job offer from a New Zealand employer
• there is a specific purpose or event for which you need to come to New Zealand to work
• you are a student or trainee who wants to work here, or
• you want to join your partner here and work.


Please click here for more information 

Work opportunities for working holidaymakers

New Zealand has lots of short-term work opportunities for working holidaymakers.
We encourage people on working holiday permits to consider jobs in the areas of agriculture, horticulture and viticulture (grape-growing).

Please click here for more information.

Recognised Seasonal Employer (RSE) Work Policy

If you are overseas, aged 18 years and over, you want to work in New Zealand’s horticulture and viticulture industries, and you have a job offer from an employer whom we have approved, you may be eligible for a visa and/or permit under the Recognised Seasonal Employer Work Policy.
Please note that people approved to work in New Zealand under this policy will be issued limited purpose visas and permits. Please click here for more information.

Ask for help
Whether you are self employed or working for an employer, if you have any questions about your situation, we recommend that you ask for professional help.
– With regard to your financial management, please either meet with an accountant or one of the business advisors from the IRD who will give you professional guidance and may help save you time and money. The IRD’s business advisory service is free.

– With regard to employment relations, please contact the Dept of Labour or the Citizen’s Advice Bureau, who may be able to support you with information or advice

– If you are on a benefit, please contact your case manager or your local Work and Income branch t your case manager or your local Work and Income branch


Important Contacts:
Inland Revenue
Website www.ird.govt.nz/
Phone numbers at IRD.
Ask for the phone number of your local Business Advisor www.ird.govt.nz/contact-us/phone
Please have your IRD number on hand

Work and Income
Website www.workandincome.govt.nz
Please have your client number on hand

Citizen’s Advice Bureau
Website www.cab.org.nz

Dept of Labour
Website www.ers.dol.govt.nz

ACC
Website www.acc.co.nz/index.htm

Dept of Immigration
Website www.immigration.govt.nz


Disclaimer The content of this document provides general guidance only on some frequently asked questions and is not legal advice. It will not answer every question and should not be used as a substitute for reference to the applicable legislation and/or independent legal advice. Green Sky NZ Ltd takes no responsibility for the results of any decisions made and/or actions taken on the basis of information on this website, or for any errors or omissions.
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