New Zealand Contractor Day Rate Calculator

A PAYE agency (umbrella) runs your income through payroll exactly like an employee: IRD income tax, the 1.75% ACC Earner's Levy, and KiwiSaver are deducted automatically, and the agency handles GST and invoicing if you're below the threshold. A sole trader invoices clients directly, deducts genuine business expenses before tax, and pays their own ACC levy (which includes an industry-rated Work Levy on top of the Earner's Levy component), but carries more admin and no automatic KiwiSaver contribution. At most day rates the two structures land close on tax; the real trade-off is admin overhead versus deductible expenses.

Multiply your target base salary by roughly 1.15 to 1.3 to cover unpaid leave, lost job security, and (if sole trader) your own ACC levy with no employer to share it, then divide by your realistic billable days for the year (220 is a common default). For example, a NZ$154,000 target contract income through a PAYE agency over 220 billable days at 3.5% KiwiSaver works out to a $105,218 annual take-home, a 68.3% retention rate. The calculator above runs this for your own numbers.

Yes. A PAYE agency contractor has the standard 1.75% ACC Earner's Levy deducted from pay, capped at NZ$156,641 of earnings, the same as any employee. A self-employed sole trader is liable for their own ACC CoverPlus cover instead, which layers an industry-rated Work Levy and the Working Safer Levy on top of the Earner's Levy component, set by ACC's Classification Unit for your declared business activity. This calculator applies ACC's published average Work Levy + Working Safer Levy rate (0.77%) as a simplification, since the real rate varies by industry classification.

It depends on your structure. Through a PAYE agency, KiwiSaver works exactly like a normal job: you choose an employee contribution rate (3.5%, 4%, 6%, 8%, or 10%) and the agency adds the 3.5% employer minimum on top. As a sole trader, there's no employer to make that contribution, and KiwiSaver isn't automatically deducted from your invoiced income, contributions are entirely voluntary and something you'd set up yourself.

Both structures are taxed on the same progressive IRD income tax bands (10.5% to 39%) as an employee, there's no IR35-style separate contractor tax code in New Zealand. The real differences are in what counts as taxable income (a sole trader deducts genuine business expenses first) and how ACC and KiwiSaver are handled, as covered above.

220 billable days is a common default: a 260-day working year (52 weeks x 5 days) minus roughly 11 public holidays, a paid-leave-equivalent buffer, and a realistic allowance for downtime between contracts. The calculator lets you adjust this to your own situation.