Certificate Of Exemption IR331

A certificate of exemption IR331 is the document a payer checks when a contractor is allowed to receive schedular payments with no tax deducted. Inland Revenue still uses that form code on the certificate. The application itself is different.

You apply in myIR or on IR332. You renew every tax year. A New Zealand tax resident paid through labour hire cannot use this certificate for those payments. That path is a 0% tailored tax rate.

IR331, IR332, and myIR: which paper is which

Employer’s guide IR335: you may be shown a certificate of exemption by a contractor. The heading on that page is Certificate of exemption IR331. Dairy farming IR252 April 2024 uses the same code when a farmer checks an agricultural contractor. The contractor does not hand the certificate over for keeps. IR335: it is usually needed for multiple payers, for example agricultural contractors working for different farmers. The payer keeps a note of the certificate number and the payments.

Apply on Inland Revenue’s form Request for PAYE exemption on Schedular Payments IR332 April 2017, or in myIR. Apply page: go to More in your Income Tax account. Tailored Tax application sits under Manage account. Choose the Certificate of Exemption application. You need your IRD number. They aim to process within 10 working days. February and March can take longer. A copy appears in myIR when it is approved. Show it to the payer. Process clocks for who deducts sit on the Withholding and Schedular hub.

IR332 only issues certificates to people who have identified themselves as being in business, who receive income subject to deductions under schedule 4 of the Income Tax Act 2007 (section RD 8: not a payment that is essentially salary or wages if a master and servant relationship exists), and who have a good record of filing returns and making payments. IR332 note: if you receive income under a labour hire arrangement you cannot use a certificate of exemption, unless you are a non resident.

What the payer must check

IR335 Checking the IR331: the certificate must be valid and current. If it is, do not deduct. If it is not, the contractor must complete IR330C and the payer must deduct. IR252: check that the work the person is doing is the same as the work shown on the certificate. A modelling exemption does not cover hay baling. IR335: do not include tax exempt payments in employment information returns. A certificate cannot be used by an employee to stop PAYE from salary or wages, or for payments under certain labour hire arrangements.

Revenue Alert RA 26/02, issued 6 August 2026: growers and other horticulture payers must withhold unless the contractor has shown a valid and current certificate of exemption or a tailored tax rate certificate with a 0% deduction rate. Certificates and tailored rates are only issued for a year ending 31 March. Payers keep copies for at least 7 years, with IR330C forms. Inland Revenue is increasing its focus on the use of certificates of exemption and tailored tax rates in that sector. The dollar split on an invoice that still has withholding sits on the withholding tax calculator.

Inland Revenue’s deductions page: some contractors are exempt because they hold a certificate. Non resident contractors may be automatically exempt or hold a certificate. IR335 also lists automatic non deduction where a non resident contractor is present in New Zealand for a total of 92 days or less in any 12 month period, or has been paid $15,000 or less in total from all payers in any 12 month period, or has total relief through a double tax agreement. That is not the same as applying for IR331. Non resident contractor applications can use IR197 after 1 April 2024 with backdating of up to 92 days. Inland Revenue’s apply for an exemption as a non resident contractor page: respond within 10 working days. Exemptions usually last for the contract, up to 12 months.

Renewal, GST, and what people mix up

Inland Revenue’s renew a certificate of exemption page: a renewal notice goes out in January or February of the year the exemption expires. Apply again in myIR the same way. Show the renewed certificate. You still pay your own income tax. RA 26/02: tax withheld under the schedular payment rules is not a final tax. Contractors still account for GST if they are registered or liable, and PAYE if they employ workers. IR335 GST example: withholding is worked on the GST exclusive amount. Contractor GST invoices: GST for contractors basics.

Surreal’s entertainer help still asks venues to load IR331 or a withheld percent, and treats a missing IRD number as 45%. Inland Revenue’s no notification rate is 45% (or 20% for a non resident contractor company) when IR330C sections are missing, not because a booking platform picked a calendar date. IR335: New Zealand resident entertainers can hold IR331. Visiting non resident entertainers and professional sportspeople cannot choose a rate below 20%.

Paul Sheehan’s older Christchurch note was right that you apply on IR332 and the certificate is IR331, and wrong if it is read as “a company never has withholding”. IR335: do not deduct to a company except a non resident contractor, a non resident entertainer, certain labour hire payments, or an agricultural, horticultural, or viticultural company supplying labour on listed land. RA 26/02 repeats that horticulture labour payments include companies.

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