Plan contractor hiring in New Zealand

Engage a New Zealand contractor under a contract for services and pay against invoices, with their business identity and GST status agreed before work starts. A sole trader handles their own income tax, ACC levies and GST where applicable. The overseas location of the customer can make an exported service eligible for GST at 0%, while the contractor still has registration and record-keeping duties in New Zealand. Collect the supplier's legal or trading name and confirmation of GST status separately. A zero-tax invoice tells the accounts team how that supply was taxed; it does not settle whether the person operates an independent business.

Sources: Employment New Zealand: employee or contractor, Business.govt.nz: sole traders, Inland Revenue: zero-rated supplies, Inland Revenue: registering for GST

If the line is crossed

If the worker is treated as an employee for tax, the foreign-employer rules decide who must handle employment taxes. An overseas employer must register where it has sufficient New Zealand presence. Providing non-cash benefits or superannuation contributions can also require registration unless responsibility is documented with the employee. When the overseas employer need not register, the New Zealand employee registers as an IR56 worker, unless the employer registers or arranges someone else to manage employment-related tax. IR56 workers calculate, file and pay their employment taxes monthly. Genuine self-employed contractors cannot use IR56, so agreeing that the worker handles tax is not, by itself, evidence of self-employment.

Sources: Inland Revenue: IR56 workers, Inland Revenue: employees of overseas employers, Inland Revenue: non-resident employer registration

Supply correction information

The GST-registered contractor provides supply correction information when an original supply record contains an error, including the wrong GST rate or amount. Payment of the original invoice does not remove the need to correct it. The correction identifies the seller and GST number, the correction date, the original supply record and what has changed. Keep it with the original invoice so the amount approved, the amount paid and any adjustment can be reconciled. A discount or rebate whose terms were already agreed in writing or recorded in the taxable supply information has a specific exception from issuing a correction.

Issued by: The GST-registered contractor provides the correction to the customer.

Timing: When correcting the original supply information; an already-paid invoice can still need correction.

Sources: Inland Revenue: supply correction information

An ordinary remote service supplied by a GST-registered New Zealand contractor to a non-resident business outside New Zealand can carry GST at 0%. This assumes the overseas customer itself receives the service abroad, with no work directly connected to New Zealand land or goods. The contractor needs to establish the customer's non-resident status. For remote services, existing customer checks may suffice; alternatively, Inland Revenue allows two listed pieces of evidence, such as a billing address and location information. Give the contractor your business identity and overseas billing details at onboarding. Resolve GST separately before adding local property work or delivery to a New Zealand recipient.

Sources: Inland Revenue: zero-rated supplies, Inland Revenue: current GST issues, May 2026

What an invoice has to show

• Taxable supply information, with flexibility over the document format

  New Zealand's GST rules require taxable supply information and allow it to be held across records. Since 1 April 2023, an invoice, contract, supplier agreement and bank statement can work together to support the supplier's GST figures. A document may still be headed Tax Invoice, and existing compliant invoicing practices remain acceptable. For the buyer, a clearly identified invoice with supporting records is easier to approve and reconcile than disconnected information. Agree which records the contractor will send and retain them together. Check the information they contain before asking for a particular heading or replacement template.

  Sources: Inland Revenue: taxable supply information, Inland Revenue: taxable supply information requirements, Business.govt.nz: getting paid on time

• The supplier's GST number above NZ$200; buyer identifier rules depend on buyer GST registration

  For a supply above NZ$200, the GST-registered contractor's supply information includes their name or trading name and GST number, plus the date, service description and required amounts. A zero-rated supply can show the value before GST, zero GST and the total. For supplies above NZ$1,000, Inland Revenue's additional buyer-name and identifier requirements apply when the buyer is GST registered. An overseas customer without New Zealand GST registration should supply its real business and billing details for the transaction. It need not obtain an NZBN or New Zealand GST number merely to fill a supplier's invoice template.

  Sources: Inland Revenue: taxable supply information requirements, Inland Revenue: zero-rated supplies

Direct contractors bill when the job is completed or at agreed intervals, with payment terms negotiated before the work starts. For a long engagement, agree what each invoice covers and who approves it, then give the contractor the buyer reference your accounts team needs. New Zealand's business guidance recommends splitting longer work into smaller billings where appropriate and showing the due date and payment terms clearly. Put the agreed schedule into the contract and carry it onto the invoices. This makes a missed approval or missing purchase reference visible before the payment date arrives.

Sources: Business.govt.nz: contractor finances, Business.govt.nz: getting paid on time

When invoices are settled

Payment on the 20th of the following month is a common New Zealand business term, and the date for this engagement should be agreed expressly. It is a commercial convention, so an overseas buyer's own payment cycle should be discussed before signature. State whether the agreed clock runs from the invoice, completion or another defined event, and make the resulting due date clear. If an invoice goes unpaid, the practical response is to identify the outstanding amount, follow up promptly and track the correspondence. Do not treat the customary twentieth-of-month term as an automatic statutory late-payment penalty.

Sources: Business.govt.nz: contractor finances, Business.govt.nz: getting paid on time

Local currency rules

New Zealand places no exchange controls on foreign-exchange transactions undertaken there. That does not remove the contractor's tax accounting requirement: when a GST-registered supplier receives foreign currency for services, it converts the amount into New Zealand dollars using the exchange rate at the GST time of supply. Keep the agreed amount and currency clear in the payment records so the supplier can reconcile the receipt and its New Zealand tax value. This conversion is the supplier's GST accounting step.

Sources: New Zealand Treasury: government securities overview 2025–2026, Inland Revenue: GST plus, March 2026

Applying employee deductions to a sole trader's invoice

A sole trader's income tax, ACC levies and personal KiwiSaver arrangements are separate from the customer's invoice payment. The contractor is responsible for their own taxes and applicable ACC levies; GST follows the supplier's registration and the supply. For a genuine non-employee contractor, KiwiSaver contributions follow their agreement with the scheme provider, which may set a minimum amount or payment intervals. Discuss these costs when agreeing the commercial fee instead of copying employee deduction percentages into the supplier record. If the relationship is employment for tax purposes, move to the appropriate employment-tax arrangements before processing further payments.

Sources: Business.govt.nz: sole traders, Inland Revenue: non-employee KiwiSaver contributions, Inland Revenue: IR56 workers, Inland Revenue: employees of overseas employers

Rejecting an ordinary invoice because New Zealand supports eInvoicing

Private-sector eInvoicing remains voluntary, and the GST record rules continue to accommodate compliant ordinary invoices. New Zealand also uses government procurement requirements to encourage adoption, but those requirements do not turn an offshore private customer into a government purchaser. Agree any structured invoice format with the contractor as a commercial requirement, including the business identifiers and references your systems need. When no such format was agreed, check the supplier's GST status, the service and the taxable supply information before requesting a replacement. A change of format should solve a processing problem that actually exists.

Sources: Inland Revenue: current GST issues, May 2026, Inland Revenue: taxable supply information