NZ Tax Guide for Builders (2025-26)
Builders in New Zealand may be employed by a construction company or work independently as self-employed contractors. Licensed Building Practitioners (LBPs) are registered with the Building Practitioners Board. Self-employed builders in the construction industry are often required to register for GST and manage their own provisional tax.
Quick Tax Snapshot — Median Builder Salary
Based on Stats NZ data for residential construction workers. Apprentice builders earn $42,000–$58,000. Licensed building practitioners (LBPs) earn $65,000–$85,000. Self-employed builders can earn $90,000–$130,000+ depending on workflow.
| Item | Annual | Monthly |
|---|---|---|
| Gross Salary | $68,000 | $5,667 |
| Income Tax (PAYE) | −$12,621 | −$1,052 |
| ACC Levy (1.6%) | −$1,136 | −$95 |
| KiwiSaver (3%) | −$2,040 | −$170 |
| Take-Home Pay | $52,204 | $4,350 |
Key Deductions for Builders in NZ
LBP licence fees
Licensed Building Practitioner licence fees required to perform restricted building work are deductible.
Tools and equipment
Power tools, hand tools, safety gear, and other equipment used in building work are deductible. Items under $1,000 can be expensed immediately; larger items are depreciated.
Vehicle expenses
Ute or van running costs for transporting tools and materials to job sites are deductible for self-employed builders based on business use percentage.
Work clothing and safety equipment
Hi-vis vests, safety boots, hard hats, and other required safety gear are deductible expenses.
Deductibility depends on individual circumstances. Consult a registered tax agent or accountant for personalised advice. See IRD guidance on individual expenses.
Frequently Asked Questions
How much tax does a builder pay in NZ?
On a $68,000 salary in 2025-26, a builder pays approximately $12,620 in income tax. The effective rate is about 18.6% and the marginal rate is 30%. Including ACC levy and 3% KiwiSaver, take-home pay is approximately $52,200.
Do subbies (subcontractors) in construction pay different tax?
Labour-hire contractors in construction are often subject to schedular payment withholding tax at 20%. Some are treated as employees if they meet the criteria under the employment tests. Genuine business subcontractors may GST-register and invoice for their work.
What ACC levy do self-employed builders pay?
Self-employed builders pay the earner's levy (1.67%) plus a work cover levy based on the residential construction industry classification. Construction has a higher levy rate than office work due to injury risk, but also provides cover for work-related injuries.
Can builders claim apprentice training costs?
Employers who take on apprentice builders can claim training costs as a business expense. The Government's Apprenticeship Boost programme also provides payments to employers to support apprentices in the construction trades.
Calculate Your Actual Take-Home Pay
The figures above are based on a median salary estimate. Use our free calculator to see your exact take-home pay for your own salary — including student loan repayments if applicable.
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See NZ tax breakdowns for other common professions:
Calculations assume 2025-26 tax year, 3% KiwiSaver employee contribution, no student loan, and ACC earner's levy at 1.6% (capped at $152,790). Figures are estimates only. New Zealand has no personal allowance — income tax applies from the first dollar of income.
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