IR3 season: a sole trader's filing checklist

The IR3 is the individual income tax return for people who earn income that isn't fully taxed at source (most sole traders, freelancers, and contractors fall into this category). It covers the NZ financial year from 1 April to 31 March.

For most non-agent filers (people who file directly through myIR without a tax agent), the standard due date is 7 July of the year following the income year. For the year ended 31 March 2026, that's 7 July 2026.

If you use a tax agent, they typically have a later extension; confirm the exact deadline with them.

The IR3 asks for all your income sources. For sole traders, this typically means:

Invoiced revenue (self-employed income): your total revenue for the year, excluding GST. PayWren's Reports → Income Summary shows total revenue received for the FY. For the standard return, use cash received (payment date), not invoice-issued amounts.

Schedular payments / withholding tax: if any clients deducted withholding tax (WT) from payments before paying you, you need a certificate from them (they should provide one by the end of April). PayWren records WT-deducted amounts if you've set up withholding on those invoices.

Other income: interest, rental income, PIE income, dividends, or any salary or wages from a different job all go on the IR3.

Deductible expenses reduce your taxable income. Expenses must be incurred in earning your income to be deductible. Common categories for sole traders:

Direct costs: software subscriptions, professional services, advertising, printing, tools.

Home office: either the IRD square-metre rate (no receipts needed) or actual costs (power, internet, insurance, council rates, mortgage interest or rent at your office's floor-area share).

Vehicle: either the kilometre rate method (Tier 1 rate on the business share of the first 14,000 total km; Tier 2 beyond) or a logbook-based actual-cost method.

Entertainment: meals and entertainment with clients are generally only 50% deductible.

PayWren's Reports → Profit & Loss shows your categorised expenses for the financial year.

PayWren is not a tax return tool, but its reports feed the numbers your accountant or myIR needs:

Self-employed income (IR3 question 24): use the received revenue total from Reports → Income for the year.

Business expenses (IR3 question 24 continued): use the categorised totals from Reports → Profit & Loss. Add any vehicle and home office deductions calculated separately.

Provisional tax paid (IR3 question 29): use the amounts from Tax Planner → Payment log, or check your IRD account directly in myIR.

GST registered? If you're GST registered, the income you report is GST-exclusive. PayWren's reports already exclude GST from revenue figures for registered workspaces.

The IR3 also determines whether you'll be a provisional taxpayer next year. If your residual income tax (RIT: the net income tax you owe after all credits, not counting provisional tax already paid) exceeds $5,000, you become a provisional taxpayer for the following year (Income Tax Act 2007 s RC 3).

Provisional tax means paying in three instalments spread across the year rather than all at once. The standard method is to pay 105% of last year's RIT split equally across the three due dates.

If your RIT is between $5,000 and $60,000 and you pay the standard-method instalments on time, you're in the safe harbour: no use-of-money interest applies to any year-end shortfall (Tax Administration Act 1994 s 120KE).

See the Provisional tax for sole traders guide at /guides/provisional-tax-explained for a full breakdown.

Work through this before lodging your return: