Declaring untaxed income in New Zealand is a legal responsibility for many individuals, contractors, and property owners. If you earn income that has not had tax deducted at source, Inland Revenue (IRD) may require you to disclose that income by filing an Individual Income Tax Return (IR3).
Many people assume that if they earn a salary, they do not need to worry about tax returns. However, additional income streams—such as rental income, self-employment, or overseas income—can create tax obligations even when PAYE is already deducted from wages.
🔍 When Do You Need to Declare Untaxed Income?
According to Inland Revenue (IRD) guidelines, you are required to file an IR3 tax return if:
- You earned more than $200 of income not taxed at source, and
- The income was earned during the tax year 1 April to 31 March
If all of your income comes from salary or wages, PAYE has been correctly deducted, and you are using the correct tax code, IRD will usually automatically assess your tax position, and you may not need to file a return.
However, once you receive any additional untaxed income, you must review whether an IR3 is required.
📌 What Types of Income Must Be Declared?
ou must declare income if both of the following apply:
The total untaxed income exceeds $200 per tax year, and
The income was not taxed at source.
Common examples of untaxed income in New Zealand include:
- Self-employment and contractor income
(e.g. rideshare drivers, tradies, freelancers, consultants) - Rental income
(long-term rentals, Airbnb, holiday homes) - Overseas income
(wages, pensions, interest, dividends, or business income earned overseas) - Investment income
(interest or dividends not taxed at source) - Trust distributions not already taxed
- Cryptocurrency income
(trading profits, mining income) - Cash jobs or informal side income
If you are declaring untaxed income in New Zealand, it is also your responsibility to keep complete and accurate records, including invoices, bank statements, and receipts, to support your tax return.
⚠️ Why It’s Important to Declare All Income
New Zealand operates on a voluntary compliance tax system, but IRD uses extensive data-matching tools, including information from:
- Banks and financial institutions
- Overseas tax authorities (under international agreements)
- Online platforms such as Uber, Airbnb, and investment providers
Failing to declare untaxed income can result in:
- Late filing penalties
- Interest on unpaid tax
- Shortfall penalties for careless or intentional errors
- Increased risk of IRD audits or reviews
Declaring income correctly the first time helps avoid compliance issues and builds a reliable tax record.
✅ How METTAX Can Help
At METTAX, we understand that managing untaxed income—especially for self-employed individuals and small businessAt METTAX, we specialise in helping individuals, contractors, and property owners manage untaxed income with confidence.
Our services include:
- Identifying income that must be declared
- Preparing and filing IR3 tax returns accurately
- Maximising legitimate deductions and expenses
- Meeting all IRD deadlines and compliance requirements
📞 Contact METTAX today for professional advice and stress-free tax compliance.
