Do I file a separate return for my business?
No, as a sole trader, you file a single return that covers both your personal and business income.
This is one of the key differences between being a sole trader and running a company. Because a sole trader and their business are legally the same person, everything goes on one return.
The IR3 Individual Income Tax Return
The return you file is called the IR3. It's an individual income tax return that covers all your income for the year, including:
- Business income (revenue from your self-employed work)
- Any salary or wages from other jobs
- Rental income
- Interest and dividends
- Any other personal income
Your business profit is calculated by subtracting your allowable business expenses from your business income. That profit figure is then added to any other income you earned during the year, and you pay tax on the total.
What else do you need to include?
Along with your IR3, IRD may require you to include a summary of your business financials. This is done using the IR10 — Financial Statements Summary, which captures your total income, expenses, assets, and liabilities for the year.
If your income is straightforward, Lodg helps you pull this information together automatically.
The NZ tax year
The New Zealand tax year runs from 1 April to 31 March. Your IR3 covers all income earned in that period.
Does everyone need to file an IR3?
Not always. If all your income comes from salary or wages with tax deducted at source (PAYE), IRD may automatically calculate your tax and you won't need to file. However, if you have any self-employed or business income, you must file an IR3.
💡 Lodg handles your IR3 for you — connecting your income and expenses, calculating your tax, and filing directly with IRD on your behalf.
Source: ird.govt.nz — Individual Income Tax Return IR3 | business.govt.nz — Income tax and provisional tax