Withholding Tax NZ: Rates, Types and What You Need to Know (2025/2026)
Withholding tax sounds complicated. It is not. Here is everything you need to know.
Withholding tax sounds complicated. It is not. Here is everything you need to know.
What Is Withholding Tax?
A withholding tax is a type of tax where the tax is deducted from the income received. Rather than you making payments at a later date, the one who pays you pays directly to the IRD on your behalf.
It can be termed as paying the tax in advance.
Similar to the Pay As You Earn system, it is applicable to everyone, including contractors, investors, and non-residents.
The 3 Main Types of Withholding Tax in NZ
1. Resident Withholding Tax (RWT)
This is applicable for NZ citizens who earn interest or dividends from their NZ savings account or investments.
Your financial institution will withhold RWT before releasing payments to you. The percentage withheld depends on your gross taxable income.
RWT Rates for Interest — 2025/2026
| Your Total Taxable Income | RWT Rate |
|---|---|
| Up to $15,600 | 10.5% |
| $15,601 – $53,500 | 17.5% |
| $53,501 – $78,100 | 30% |
| $78,101 – $180,000 | 33% |
| $180,001 and over | 39% |
RWT on Dividends: always 33%
Not sure which rate applies to you? Use the TaxPop RWT Calculator to check in seconds.
For the full official rate guidance visit the IRD RWT rates page.
⚠️ No IRD number? Your bank will deduct tax at 45%. Always give your bank your IRD number.
Quick example:
You earn $100 interest. Your RWT rate is 17.5%. Your bank deducts $17.50 and pays you $82.50. At tax time, that $17.50 is credited against what you owe.
2. Non-Resident Withholding Tax (NRWT)
This applies to people or businesses overseas earning income from NZ sources — such as dividends, interest, or royalties.
Standard NRWT Rates:
| Income Type | Standard Rate |
|---|---|
| Dividends | 15% |
| Interest | 10% |
| Royalties | 15% |
These rates can be lower if NZ has a double tax treaty with the other country.
Quick example:
An Australian company earns $1,000 in royalties from a NZ business. The NZ business withholds 15% ($150) and pays the Australian company $850, sending the $150 to IRD.
3. Schedular Payments (Contractor Withholding Tax)
This is applicable to contractors and self-employed individuals within the following sectors: construction, labour hire, entertainment, and some professions.
Your client withholds the tax before paying you and transfers it directly to IRD.
Rates:
NZ residents: 10% minimum
Non-residents: 15% minimum
No IR330C form provided: 45% (the no-notification rate)
Quick example:
You invoice a client $1,000. You have chosen a 20% withholding rate. Your client pays you $800 and sends $200 to IRD. At the end of the year, that $200 counts toward your income tax bill.
The IR330C Form — What Every Contractor Needs to Know
If you are a contractor receiving schedular payments, you need to fill in the IR330C Tax Rate Notification for Contractors form.
This tells your client what rate to deduct. You choose your own rate — but it must be at least 10% (or 15% if you are a non-resident).
You give the form to your client — not to IRD.
If you do not hand in an IR330C, your client must deduct tax at 45%. That is a lot more than most people need to pay.
Not sure what rate to choose? IRD has a free tax rate estimator at ird.govt.nz.
Important — Withholding Tax Does NOT Cover Everything
This is something a lot of contractors and freelancers get wrong.
Withholding tax only covers your income tax. It does not cover:
GST — you manage this separately if your income is over $60,000 per year
ACC levies — you pay these separately once a year
Student loan repayments — these are your responsibility to track
Set money aside for these separately. Do not assume withholding tax has covered your full tax picture.
What Happens at the End of the Tax Year?
Withholding tax is just an estimate. At the end of the tax year (31 March), IRD works out if you paid the right amount.
Paid too much → you get a refund
Paid too little → you pay the difference
Residual tax over $5,000 → you may need to pay provisional tax the following year
You still need to file an income tax return even if withholding tax was deducted all year.
Quick Summary Table
| Type | Who It Applies To | Common Rates | No IRD Number Rate |
|---|---|---|---|
| RWT | NZ residents — interest & dividends | 10.5% to 39% | 45% |
| NRWT | Non-residents — NZ income | 10% to 15% | Higher rates apply |
| Schedular | Contractors & self-employed | 10% minimum | 45% |
Work Out Your RWT in Seconds
Not sure which RWT rate applies to you? Use the TaxPop RWT Calculator to check your rate and estimate how much tax will be deducted from your interest or dividend income.