The Simple Guide To Tax For Film Production WorkersCategories News & Updates
New Zealand’s booming film industry means more and more Kiwis are employed in film production than ever before, from being part of the technical crew to film extras. With laws changed to encourage filming in New Zealand, rebates promised for big-budget productions, and purpose-built facilities popping up, it seems like the boom will continue for some time.
While film production is an exciting and fairly new industry in New Zealand, the tax involved for employees can be a little confusing. Read on to learn how film production workers are defined for tax purposes, and what your tax obligations are as a film production worker.
Tax definition of film production workers
As a film production worker, your status will almost certainly be an independent contractor, including those who are temporary workers (such as film extras). The exception to this is if you have a written employment agreement that specifically provides that you’re an employee.
Film production work includes film and video game production. However, it doesn’t extend to work on television programmes. Here are some examples of those who would be considered a film production worker:
- Actors, voice-over actors, stand-ins, body doubles, stunt performers, extras, singers, musicians, dancers or entertainers
- Anyone who performs pre-production work, or those that provide pre-production services (both on and off-set).
- Anyone who performs production work or those that provide production services (both on and off-set).
- Anyone who performs post-production work or those that provide post-production services (both on and off-set).
- Anyone described in the above who may also perform promotional or advertising work, or those that provide promotional or advertising services (both on and off-set), in relation to film or video game production.
What tax code am I on?
As an independent contractor, film production workers are on the WT tax code and need to have withholding tax deducted from the payments they receive. These payments are known as schedular payments, formerly known as withholding payments.
Recent changes to the way contractors pay tax make it easier for some workers using the WT tax code. The changes mean that if you’re a contractor employed through a recruiter or employment agency, you’ll have tax deducted on your behalf by the recruiter or agency. With these changes, it’s important that you complete a tax rate notification form (IR330C) in order to pick the correct tax rate. Failure to do so will mean you’ll be taxed at the no-notification rate of 45% — definitely not ideal!
The IRD deducting withholding tax from your schedular payments throughout your employment means you won’t be walloped with an enormous tax bill at the end of the year. So it’s certainly in your best interests to make sure it gets sorted!
What do film production workers need to know about tax?
As a film production worker there are also some other tax-related things that it pays to bear in mind. These can help you avoid any nasty surprises at the end of the financial year — or may even work in your favour!
As a contractor you need to have tax deducted from all schedular payments you receive, though there can be some exceptions to this rule. For example, if you have a either an exemption certificate or a 0% special tax rate certificate then you will pay your income tax through the provisional tax system instead.
Another thing to keep in mind is that there will be no automatic student loan repayments taken from your schedular payments. This means that if you have a student loan and your total income is over the annual repayment threshold, you’ll need to make your own arrangements for repayment.
Finally, you’ll also be responsible for paying your own ACC levies, though the ACC and the IRD has made this relatively hassle-free. You’ll be prompted to pay your levies after getting an invoice from ACC, who receives your details from the IRD after you file your tax return (don’t worry, we’ll talk about that later one!). If you’re concerned about how much you should put aside to cover your levies, the ACC website has tools to help you estimate or calculate them.
What are your tax obligations as a film production worker?
As well as having tax deducted from schedular payments, film production workers who earn over $200 in the financial year also have an obligation to complete an individual income tax return — known as an IR3 Form. As annoying as filing a tax return may seem, it’s worth doing as you can be penalised if you were supposed to complete one, but didn’t. Not to mention that if you’re owed a tax refund, an IR3 will help you secure it!
Filling in an IR3 Form allows the IRD to see your before-tax (gross) income, the tax already deducted from that income and any expenses or deductions you’re allowed to claim. This could include expenses in the form of fees paid to MyTax for completing your tax return, or premiums paid on income protection insurance — just remember to hold onto those invoices or receipts.
As a contractor, filing a tax return and working out tax obligations can seem daunting, but we can take this confusing task off your hands. Get in touch with us to begin sorting it all out, or fill out our application form to get started today.