Payroll tax guide – Contractor exemptions
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  1. Payroll tax guide – Contractor exemptions
  2. Services ancillary to the supply
    of goods
  3. Services not ordinarily required
    by your business
  4. Services required for 180 days or
    less in a financial year
  5. Services provided for 90 days or
    less in a financial year
  6. Services provided by a contractor
    to the public during the financial year
  7. Services performed by 2 or
    more people
  8. Services for the conveyance of goods provided by an owner driver

3. Services not ordinarily required
by your business

This exemption applies when:

  • an employer engages a contractor to provide services that are not ordinarily required in the employer’s business during a financial year, and
  • the contractor conducts a business of providing services of the same kind to the public generally.

See section 32(2)(b)(i) of the Payroll Tax Act 2007 (PTA).

For more details:

Examples

Exemption applies

A real estate agency requires an electrician to install new power outlets as part of an office refurbishment.

The electrician provides similar services to other clients as part of their business.

The contract is exempt since the real estate agent does not ordinarily require these services and the electrician provides similar services to the public.

Exemption does not apply

A tree removal business normally engages employees to perform tree trimming and felling services.

To meet increased demand from some large contracts with customers, the business engages an additional tree feller as a contractor.

This exemption does not apply because the tree removal business ordinarily requires tree felling services throughout the year.