How is a yoga teacher taxed?

Majority of the yoga teachers are working as a sole trader, I will explain clients under this structure.

Tax is paid on profit – business income less business expenses.

The profit from the teaching business is added to any other income during the tax year, eg jobs, profits from other businesses, and the resultant total is subject to Income Tax.

Income Tax

The tax rates (2019/20) are:

Taxable income Tax rate

Up to $14,000 10.5%

Over $14,000 and up to $48,000 17.5%

Over $48,000 and up to $70,000 30%

Remaining income over $70,000 33%

ACC Payment

If you’re a PAYE employee or PAYE shareholder-employee, your employer will pay this on your behalf. This comes out of your income, like tax.

If you’re self-employed or a non-PAYE shareholder-employee, we’ll send you a levy invoice after you file a tax return. After your income tax return has filed, ACC will calculate your ACC levy then send you an invoice for that.

Business Losses

If you make a loss – that’s to say your business expenses as a teacher exceed your business income, then in the first instance the loss is offset against other income in the year, eg a job, for a tax refund. In some cases it may be carried forward or back to earlier or later tax years – talk to us for advice.