The 2025–26 tax year ended on 31 March 2026. If you're a self-employed tradie — sole trader, contractor, or working in a partnership — you now need to file an IR3 individual income tax return with Inland Revenue (IRD). The clock is ticking: the self-filing deadline is 7 July 2026. Here's everything you need to know to get it right.
Who Needs to File an IR3?
You must file an IR3 if you earned self-employment income in the 2025–26 tax year and any of the following apply:
- You are a sole trader or self-employed contractor
- You had income not taxed at source (invoiced labour, cash jobs)
- You earned rental income
- Your residual income tax (RIT) exceeded $200 for the year
Employees on PAYE generally don't need to file, but almost every tradie running their own business does. If in doubt, check with IRD or a tax agent — failing to file when required attracts penalties.
Key Deadlines
| Deadline | What it covers |
|---|---|
| 7 April 2026 | Terminal tax due (2025–26 year, if RIT > $30,000) |
| 7 July 2026 | IR3 filing deadline (self-filing via myIR) |
| 31 March 2027 | Extended IR3 deadline if you link with a registered tax agent before 31 January 2027 |
The 7 July 2026 date is the critical one for most sole-trader tradies. Miss it without contacting IRD first and penalties start stacking up.
What to Gather Before You File
Get these documents together now so you're not scrambling in late June:
Income records - All invoices issued between 1 April 2025 and 31 March 2026 - Bank statements showing deposits of business income - Any PAYE employment summaries (available in myIR from your employer)
Expense records - Receipts for tools, consumables, and equipment - Vehicle logbook or mileage records for the year - Mobile phone bills (business-use proportion) - Insurance premiums — public liability, vehicle, income protection - ACC levy invoices - Home office costs if you work from home - Trade licence fees (LBP renewals, EWRB registration, Master Plumbers membership) - Professional fees — accountant, bookkeeper
Other - KiwiSaver contribution records - Any student loan repayments deducted - Bank interest earned on business accounts
IRD requires you to keep records for seven years after the end of the tax year they relate to, even after filing.
2025–26 Income Tax Rates
Your net profit (income minus allowable expenses) is taxed progressively:
| Income band | Rate |
|---|---|
| Up to $15,600 | 10.5% |
| $15,601 – $53,500 | 17.5% |
| $53,501 – $78,100 | 30% |
| $78,101 – $180,000 | 33% |
| Over $180,000 | 39% |
Each rate only applies to the slice of income within that band. A tradie earning $90,000 net profit doesn't pay 33% on the full amount — only on the portion above $78,101.
Key Deductions for 2025–26
Already familiar with the main claims? See our full guide on NZ tradie tax deductions. For this year's return, don't miss these:
Investment Boost deduction From 22 May 2025, businesses can claim a 20% first-year deduction on new depreciable assets — on top of normal depreciation. If you bought a new work trailer, scaffolding, laser level, or similar after that date, you're entitled to this bonus write-off. IRD confirmed it applies to the 2025–26 and future tax years, so review any new asset purchases carefully.
Low-value assets Assets costing less than $1,000 (excluding GST) can be fully written off in the year of purchase rather than depreciated over time. Keeps things simple and reduces taxable income immediately.
Vehicle expenses Claim the business-use proportion of running costs — fuel, WOF, registration, repairs, insurance, loan interest. You need a logbook kept for at least 90 consecutive days to establish the business percentage. IRD scrutinises vehicle claims closely, so keep it accurate.
ACC levies Your ACC Work levy (the self-employment portion) is fully deductible. The Earners levy is not. Your ACC invoice shows the split — typically the Work levy makes up the larger portion for active tradespeople.
Tools and trade subscriptions Tools used for work are deductible. So are trade magazine subscriptions, industry training courses, and safety certifications relevant to your work.
Provisional Tax for 2026–27
Once IRD processes your IR3, they'll calculate your residual income tax (RIT) — the tax you owe after any PAYE and withholding credits. If your RIT exceeds $5,000, you'll automatically be placed on provisional tax for 2026–27.
Provisional tax is paid in three instalments throughout the year so you're not hit with a large bill at the end. The standard uplift method charges 105% of your 2025–26 RIT, split across three dates (typically 28 August 2026, 15 January 2027, and 7 May 2027).
Use the provisional tax calculator to estimate your 2026–27 instalments and plan your cash flow now, before the first due date arrives.
GST: A Reminder
If your annual turnover exceeds $60,000, you must be registered for GST. A common cash-flow trap: spending the GST component of your invoice income before the return period is due. The fix is simple — transfer 13% (approximately the net GST amount after purchases) of every invoice to a separate account as you go. Use the GST calculator to stay on top of your position throughout the year.
Should You Use a Tax Agent?
A registered tax agent isn't just for complex situations. For most sole-trader tradies, the benefits are:
- Filing deadline extended to 31 March 2027 (seven extra months)
- Professional advice on deductions and business structure
- Representation if IRD queries your return
Typical fees run $350–$700/year for a straightforward sole trader, and the fee is itself tax-deductible. Many tradies find the extension alone is worth it.
Filing via myIR: Step by Step
- Log in to IRD's myIR portal at ird.govt.nz
- Go to Income tax → File a return → 2025–26
- Enter your self-employment income (IRD won't know this — it's on you)
- Add your deductible expenses
- Review the summary and submit
myIR pre-fills employment income, bank interest, and KiwiSaver data, but your invoiced trade income and expenses must be entered manually. Check every pre-filled figure — errors do occur.
Late Filing Penalties
IRD charges a $50 initial penalty for missing the deadline, followed by $250 if the return is still outstanding after six months. On top of that, use-of-money interest accrues on any unpaid tax at approximately 10.91% per annum.
If you genuinely can't file by 7 July 2026, contact IRD before the deadline to explain. They're generally willing to work with you if you reach out proactively rather than going silent.
Get Organised for Next Year
The hardest part of tax time is usually finding paperwork from 12 months ago. Download our free NZ tradie templates at tradietools.nz/templates/ — including a business expense tracker, vehicle logbook template, and income record spreadsheet to keep you organised throughout the 2026–27 year.
Fastcrew is also worth a look — it's a tradie-built app that tracks jobs, invoices, and expenses in one place, making it much easier to pull together accurate figures when July rolls around.
NZ Tradie Tools provides free calculators, templates and guides for New Zealand tradies. Visit tradietools.nz.
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