Employment Status
As a general rule, every person who works in the New Zealand film industry, whether cast or crew, will be classed as an Independent Contractor under one of 3 categories*:
* Agents may have different requirements for Cast or Extras
Whichever category the individual falls into, they may or may not be GST registered but there is no holiday or sick pay entitlement and they are responsible for paying their own ACC levies and Kiwisaver.
Company
Often individuals may say they're a company because they're a Sole Trader 'trading as' a company name but because of the tax implications, this needs to be verified.
There are three flags for this mistake:
Self Employed Contractor / Sole Trader
Most individuals who aren't a company are Self Employed Contractors or Sole Traders and will need to fill out the IR330 in their start pack.
The production company is required by law to deduct withholding tax from each pay.
The individual can choose whatever tax rate they want deducted but the standard is 20%.
Some people choose a higher rate so they get a refund to cover other costs such as ACC levies that are generated from their end of year tax return and due later in the year. Also, these individuals can claim certain expenses which will lower the amount of tax to be paid therefore, 20% is a realistic amount. If they don't claim any expenses, they may want to consider raising the deduction amount to be sure to cover their tax liability at the end of the financial year.
RESOURCE: IRD INFO FOR SELF EMPLOYED CONTRACTOR IN SCREEN INDUSTRY
- Self Emplolyed Contractor / Sole Trader (Individual who will have witholding tax deducted therefore needs to fill out IR330)
- Company (Responsible for own tax so no witholding tax deducted therefore no need to fill in IR330)
- Partnership (Two or more individuals with the same IRD number - all need to fill in IR330)
* Agents may have different requirements for Cast or Extras
Whichever category the individual falls into, they may or may not be GST registered but there is no holiday or sick pay entitlement and they are responsible for paying their own ACC levies and Kiwisaver.
Company
Often individuals may say they're a company because they're a Sole Trader 'trading as' a company name but because of the tax implications, this needs to be verified.
There are three flags for this mistake:
- if they're not GST registered
- if they don't give a specific company name
- or if they give their own name for the bank account
Self Employed Contractor / Sole Trader
Most individuals who aren't a company are Self Employed Contractors or Sole Traders and will need to fill out the IR330 in their start pack.
The production company is required by law to deduct withholding tax from each pay.
The individual can choose whatever tax rate they want deducted but the standard is 20%.
Some people choose a higher rate so they get a refund to cover other costs such as ACC levies that are generated from their end of year tax return and due later in the year. Also, these individuals can claim certain expenses which will lower the amount of tax to be paid therefore, 20% is a realistic amount. If they don't claim any expenses, they may want to consider raising the deduction amount to be sure to cover their tax liability at the end of the financial year.
RESOURCE: IRD INFO FOR SELF EMPLOYED CONTRACTOR IN SCREEN INDUSTRY
ACC
An ACC levy will be calculated based on the end of year tax return. NOTE: the category that is put on the IR330 is not what ACC base their levies on. It will be whatever the contractor puts down as their Business Classification when they file their end of year tax return. If they don't know their classification they can ring ACC to find out because they obviously don't want to pay more than they have to.
RESOURCE: ACC INFO FOR SELF EMPLOYED
RESOURCE: ACC INFO FOR SELF EMPLOYED
GST
Most companies will be GST registered.
When does anyone, company or individual, need to register for GST?
"You must register for GST if you carry out a taxable activity and if your turnover:
Anyone can register online or fill out the form and send it to IRD
When does anyone, company or individual, need to register for GST?
"You must register for GST if you carry out a taxable activity and if your turnover:
- was over $60,000 for the last 12 months, or
- is expected to go over $60,000 for the next 12 months
(This equates to $5,000 per month. If your turnover is $5,000 per month and you expect to maintain that level all year, you'll need to register for GST.), or - was less than $60,000, but you include GST in your prices, for example taxi drivers who have included 15% in their taxi fares.
Anyone can register online or fill out the form and send it to IRD