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How much tax should I set aside from this invoice?
Just got paid? Enter the amount and see what to put aside for GST and income tax, and what's yours to spend, so the GST return and the provisional tax bill never come as a shock.
From this payment, put aside
$770.06
- Arrives in your bank
- $2,300.00
- GST (it was never yours)
- $300.00
- Income tax and ACC (about 23.5% of the amount before GST)
- $470.06
- Yours to spend
- $1,529.94
Your income reaches the 33% tax rate, so if this payment is extra on top of what you expected, setting aside 33% of it is the safer choice.
KeaBooks works this out for every payment as it lands, keeps a running total, and reminds you before each GST and provisional tax date.
Try KeaBooks free →Uses 2026/27 rates · figures last checked October 2026.
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The habit that saves contractors
The surprise bills come from spending money that was never yours. If you're GST-registered, 3/23 of every GST-inclusive payment belongs to IRD from the moment it lands. And unlike wages, nobody takes your income tax off as you go: it arrives later as provisional tax or terminal tax.
Moving the set-aside amount into a separate savings account the day you're paid means both are covered. This calculator gives you the figure for one payment; KeaBooks does it for every payment and keeps the running total.
Set-aside questions, answered
- How much of each payment should a contractor set aside in NZ?
- If you're GST-registered, all the GST in the payment (3/23 of a GST-inclusive amount), plus your income tax on the rest. For most contractors earning $60,000 to $120,000 that's roughly 20% to 26% of the amount before GST for income tax and ACC, so often around a third of what lands in total. The calculator works out your own figure.
- Why does it use my income for the whole year?
- Income tax is charged on the year, not on each payment. Using your expected yearly income gives the right average rate. If a payment is extra on top of what you expected, it's taxed at your top rate, which the calculator points out when it matters.
- What about withholding tax (schedular payments)?
- If your client takes withholding tax off before paying you, that tax has already gone to IRD for you, so it comes off what you still need to set aside. Enter the rate from your IR330C.
- Is this my provisional tax?
- Not exactly. Provisional tax is how IRD collects your income tax during the year, and the standard option is based on last year's tax, not this payment. Setting aside from every payment means the money is there whichever way IRD asks for it.
- What does a company set aside?
- A company pays a flat 28% on its profit, plus GST if registered. This calculator applies 28% to the payment before GST; expenses and any salary you pay yourself reduce it.
More free tools
Contractor Take-home Calculator →NZ GST Calculator →Contractor vs Permanent Calculator →Related reading: GST for sole traders and contractors in NZ. Or see all our free NZ money calculators.