nz_schedular_payment_calculator

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Work out the withholding tax on a New Zealand schedular payment to a contractor, and what the contractor is actually left with. Use for: 'withholding tax on contractor payment', 'schedular payment tax rate', 'IR330C rate', 'director fee tax NZ', 'what tax do I deduct from a contractor', 'no IR330C what rate'. TWO RULES CAUSE MOST OF THE TROUBLE. WITHHOLDING TAX IS CHARGED ON THE PAYMENT EXCLUDING GST. A GST registered contractor invoicing $1,000 plus GST bills $1,150, and the withholding is charged on the $1,000. Charging it on the GST-inclusive figure over-deducts by 15% of the tax every single time, and it is a common payroll error. THE RATE DEPENDS ON THE ACTIVITY, NOT ON THE CONTRACTOR. Schedule 4 sets a standard rate per listed activity. A contractor may elect anything between 10% and 40% on an IR330C. WITHOUT THAT FORM THE PAYER MUST DEDUCT AT 45%, the no-notification rate, which is punitive by design and catches people who simply never sent the paperwork back. If someone is being deducted 45%, the fix is usually a form, not an argument. THE DEDUCTION IS NOT A FINAL TAX. It is a credit against the contractor's income tax for the year, so a contractor with deductible expenses usually gets some back and one with a large profit usually owes more. year_end_credit is the figure that goes in the return. Do not describe the deduction as "the tax they paid on that job". Args: payment_excluding_gst: The fee BEFORE GST. activity: Schedule 4 activity, which sets the standard rate. rate_option: standard, nominated (an IR330C election), or no_form. nominated_rate_pct: The elected rate, 10 to 40. Required for nominated. gst_registered: Whether the contractor is GST registered. Returns: The invoice, the rate and why it applies, the tax deducted, the net to the contractor, and the credit claimable at year end.