Levy changes for business

All businesses in New Zealand pay a Work levy. From 1 April 2026 changes were introduced to keep ACC fair and sustainable, and to fund care for work-related injuries.

A quick summary of what’s changed: 

  • Interest applies to all new instalment plans 
  • Businesses on Experience Rating will pay an additional ER Programme rate  
  • The No Claims Discount has been removed.  

Self-employed and small business:

There are upcoming changes that will impact small business and self-employed people who are part of the No Claims Discount programme and/or work in the sports sector.

If you’re part of the No Claims Discount programme, your work-related claims history determines whether you receive a discount or a loading on your work levy. A loading means you’ll pay more if your claims history shows a higher risk of injury claims.

Data has shown that health and safety outcomes have not improved as a result of the programme, so the No Claims Discount is ending. This is because businesses outside the programme currently fund the discount.

Removing the No Claims Discount and updating Experience Rating means most small businesses and self-employed people will pay lower base levies than they would have under the previous system.

From the 2027 levy year onwards, No Claims Discount adjustments will no longer apply. Your Work levy will be calculated on your business activity (Classification Unit) only.

If you’re an employer or a shareholder employer:

You’ll see this change in your provisional invoice you receive in 2026.

If you’re self-employed:

The change will appear on the invoice you receive in 2027, unless you stop being self-employed earlier.

No Claims Discount reports were discontinued in 2025, but historical reports remain available in MyACC for Business. 

Log in to MyACC for Business

Source: ACC – Levy changes for business

Disclaimer
Unfortunately, with details changing all the time and at such speed, we need to add that the above content is correct at the time of writing as far as the author is aware and is very much subject to change. We have, to the best of our ability, acknowledged any shared content. All related links provided to the corresponding websites are subject to change as they are live links.

The Income Tax (Kilometre Rates for the Business Use of Vehicles for the 2025-26 income year

The rates set out below apply for the 2025-2026 income year for business motor vehicle expenditure claims. The Tier 1 rates reflect an overall increase in vehicle running costs in the income year.

The table of rates for the 2025-2026 income year

The Tier 1 rate is a combination of your vehicle’s fixed and running costs. Use it for the business portion of the first 14,000 kilometres travelled by the vehicle in an income year. This includes private use travel.

The Tier 1 rate reflects vehicle fixed ownership costs (Annual relicensing, insurance, interest on outlay, depreciation etc) and vehicle running costs (fuel, road user charges when applicable, tyres and vehicle maintenance costs).

The Tier 2 rate is for running costs only. Use it for the business portion when overall vehicle travel (both business and private) exceeds 14,000 kilometres in an income year.

Source: IRD – https://www.taxtechnical.ird.govt.nz/operational-statements/2026/os-19-04-km-2026

Disclaimer
Unfortunately, with details changing all the time and at such speed, we need to add that the above content is correct at the time of writing as far as the author is aware and is very much subject to change. We have, to the best of our ability, acknowledged any shared content. All related links provided to the corresponding websites are subject to change as they are live links.

Fringe benefit tax changes

What is the proposed change?

The main proposal would simplify the way fringe benefit tax (FBT) applies to motor vehicles by implementing a “category approach”.  FBT is currently based on employers counting the days a vehicle is available for an employee’s private use. This proposal would remove counting days and instead require employers to choose a category (based on the private use of the vehicle) and use that rate when calculating their FBT liability. 

An employer would select a category upfront when providing a vehicle to an employee and would only need to revisit this if the expected private use changes materially. These proposed categories are explained in the table below.

Categories of vehicle use for FBT purposes:

Incidental use (use that is infrequent or ad hoc) would not impact the classification of the vehicle or be subject to FBT. The purpose of this rule would be to remove those situations when there is private use of a work vehicle, but it is not remunerative or a substitute for remuneration. For example, an employee using a work van one weekend to move. What about work-related vehicles? The proposal would remove existing exemptions (such as the work-related vehicle exemption) because these should be captured within the categories. These should better reflect the range of vehicle use available for employees. For certain emergency vehicles, there would be a new exemption that would totally exempt these vehicles from the FBT regime.

Source: IRD – https://www.ird.govt.nz/employing-staff/deductions-from-other-payments/fringe-benefit-tax/types/motor-vehicles/about

Disclaimer
Unfortunately, with details changing all the time and at such speed, we need to add that the above content is correct at the time of writing as far as the author is aware and is very much subject to change. We have, to the best of our ability, acknowledged any shared content. All related links provided to the corresponding websites are subject to change as they are live links.

Get Your Penguins in a Row

EOFY changes take effect from 1 April 2026, and here’s the summary of what’s changing:

Minimum wage increase The adult rate increases to $23.95 per hour from 1 April 2026. If you have team members on or near minimum wage, review rates before your first April pay run.
ACC earners’ levy rate and threshold The ACC earners’ levy rate increases to $1.75 per $100 (threshold increases to $156,641).
KiwiSaver changes The default minimum KiwiSaver contribution rate (employee and employer) increases from 3% to 3.5% for pay periods with a pay date on or after 1  April 2026.

Source:  Smartly

Disclaimer
Unfortunately, with details changing all the time and at such speed, we need to add that the above content is correct at the time of writing as far as the author is aware and is very much subject to change. We have, to the best of our ability, acknowledged any shared content. All related links provided to the corresponding websites are subject to change as they are live links.

KiwiSaver changes

If you are an employer, you need to be aware of several changes to KiwiSaver which will come into effect on 1 July 2025, 1 April 2026 and 1 April 2028.

Government KiwiSaver contributions – 1 July 2025 Changes

The government contribution has dropped from 50 cents to 25 cents for each dollar you contribute to KiwiSaver each year, dropping the maximum government contribution from $521.43 to $260.72.

People aged 16 and 17 will now qualify for government contributions, so long as they meet other eligibility requirements. Prior to 1 July 2025, members must be 18 or older to qualify.  

People who earn more than $180,000 of taxable income in a year will no longer qualify for government contributions. 

There’ll be no change to government contributions for the year ending 30 June 2025. These will be paid in July and August at the current government contribution rate.

Default employer and employee contribution rates – 1 April 2026 Changes

The default KiwiSaver contribution rates for employers and employees will rise to 3.5% (from 3%).  

Members will be able to apply for a temporary rate reduction from 1 February 2026 if they wish to continue contributing at 3% from 1 April 2026. 

As an employer, you will be able to match your employee’s temporary rate reduction. Once your employee moves to a higher contribution rate, you will need to increase your employer contributions to the default 3.5% rate. Inland Revenue will notify you of this.

People aged 16 and 17 will qualify for employer contributions from 1 April 2026, so long as they meet other eligibility requirements. If they contribute to KiwiSaver from their wages, you will need to start making employer contributions.  

1 April 2028 changes

The default contribution rates for employers and employees will rise to 4% (from 3.5%).  

Source: KiwiSaver changes(external link)

Disclaimer
Unfortunately, with details changing all the time and at such speed, we need to add that the above content is correct at the time of writing as far as the author is aware and is very much subject to change. We have, to the best of our ability, acknowledged any shared content. All related links provided to the corresponding websites are subject to change as they are live links.

Good Governance and the Charities Act

The Charities Act changed in 2023 and now there is a new requirement related to the governance of your charity. Charities will now need to review their governance every three years. When you come to file your annual return, there will be a new question in the form asking whether you have reviewed your governance and the date you did the review.

Please note that this is a self-directed review and will be different for every charity. Charities vary immensely in size, skill and capacity.

The most important thing to remember when reviewing your current governance activities and procedures, is to think about whether what you have in your governance kete is “fit for purpose”, if it “assists your charity to achieve its charitable purpose” and “assists your charity to meet your legal requirements”.

We recommend starting with your rules document, your essential policies and procedures.  You can find your rules document on the Charities Register.  Take a good look at your most essential governance tools and see if they are still working for you.  Think about the biggest areas of risk for your charity and plan to mitigate them with good governance.

Source: https://not-for-profit.org.nz/good-governance-and-the-charities-act/

Disclaimer
Unfortunately, with details changing all the time and at such speed, we need to add that the above content is correct at the time of writing as far as the author is aware and is very much subject to change. We have, to the best of our ability, acknowledged any shared content. All related links provided to the corresponding websites are subject to change as they are live links.

Interest on overpayments and underpayments (UOMI)

From 16 January 2026 the UOMI rates on underpayment and overpayment of tax will change.  If you overpay any tax or duty, the IRD will pay you back with interest.  If you underpay tax, the IRD will charge you interest.  They may also charge a penalty with interest.  This is often called use of money interest, or UOMI.

What interest is applied to:

  • child support deductions by employers (CSE)
  • FamilyBoost (FMB)
  • fringe benefit tax (FBT)
  • goods and services tax (GST)
  • imputation accounts
  • income tax
  • KiwiSaver contributions
  • non-resident withholding tax (on interest and dividends)
  • PAYE deductions
  • residential land withholding tax (RLWT)
  • resident withholding tax (RWT) (on interest and dividends)
  • student loan deductions by employers
  • ESCT (employer superannuation contribution tax)
  • Working for Families Tax Credits (WfFTC)

Interest Amounts

Interest gets calculated daily on your overpaid or underpaid tax. It does not compound and is not included when calculating penalties.  The interest rates are set by Government and are based on market rates, so they vary over time.

The new rates are:

  • Underpayment – 8.97% down from 9.89%
  • Overpayment – 2.25% down from 3.27%

When interest starts

If you’ve underpaid tax or duty, interest:

  • starts on the day after the original due date for the amount owing, or
  • starts from a new due date (if you received Working for Families Tax Credit and you meet specific criteria to have a new due date)
  • stops on the day the overdue balance (including interest) gets paid in full.

If you’ve overpaid tax or duty, interest starts on the latest of either:

  • the day after the original due date
  • the day after payment.

Source:  IRD: Use of money interest (UOMI) rate change – January 2026

Disclaimer
Unfortunately, with details changing all the time and at such speed, we need to add that the above content is correct at the time of writing as far as the author is aware and is very much subject to change. We have, to the best of our ability, acknowledged any shared content. All related links provided to the corresponding websites are subject to change as they are live links.

 

Thinking of Becoming a Sole Trader?

To make it easy for you to set up as a sole trader. Here is a checklist to guide you: https://www.business.govt.nz/getting-started/sole-trader-guide/sole-trader-checklist/

There are four areas that are important to understand when you’re a sole trader. 

When you’re deep in the day-to-day of running your business, it can be hard to keep track of the bigger picture. Or maybe these tasks are simply not your cup of tea. Seeking advice from different sources can give you a fresh perspective on your business. Consider getting help from:

  • a traditional accountant
  • a digital accountant
  • business mentors
  • investment advisors

Seeking advice from an accountant or bookkeeper can free up time for you to focus on what you do best – your job.

Source: www.business.govt.nz

Disclaimer
Unfortunately, with details changing all the time and at such speed, we need to add that the above content is correct at the time of writing as far as the author is aware and is very much subject to change. We have, to the best of our ability, acknowledged any shared content. All related links provided to the corresponding websites are subject to change as they are live links.

Set Up a Payment Plan to tackle GST Debt

Set Up a Payment Plan to tackle GST Debt

Paying tax in one lump sum isn’t always easy. Instead you can set up an instalment arrangement to spread your bill over smaller weekly or fortnightly repayments. There is no fee to set this up, and you won’t be charged penalties and interest. You can set up an instalment arrangement in myIR under the Payment section.

Simply head to myIR, click on ‘I want to…’ then ‘Payments’.

Before you start, you’ll need to know:

  • how much you can afford to pay towards reducing your debt
  • whether you’ll be paying by direct debit or another payment method
  • when you want your instalment payments to start.

Source: MBIE & IRD:  Set up a payment plan

Disclaimer
Unfortunately, with details changing all the time and at such speed, we need to add that the above content is correct at the time of writing as far as the author is aware and is very much subject to change. We have, to the best of our ability, acknowledged any shared content. All related links provided to the corresponding websites are subject to change as they are live links.

Tax Toolbox for Tradies

Tax Toolbox for Tradies

If you’re a tradie, or someone who helps a tradie keep on top of their books, check out Inland Revenue’s tax toolbox.

The toolbox will show you:

  • what expenses you can claim and how to keep good records
  • what you need to do to stay on top of your income tax and GST
  • what your obligations are if you’re an employer.

Source: Inland Revenue – https://www.ird.govt.nz/the-tax-toolbox

Disclaimer
Unfortunately, with details changing all the time and at such speed, we need to add that the above content is correct at the time of writing as far as the author is aware and is very much subject to change. We have, to the best of our ability, acknowledged any shared content. All related links provided to the corresponding websites are subject to change as they are live links.