I was really hoping that someone out there would have already tackled this issue, but to date Ive not been able to find anything, so I might as well. Granted, I don’t really know what I’m talking about here, and this is more for my own personal use, so if you have come here from elsewhere (hello!) please make sure you verify the info yourself.

Step one: Getting your IRD number

The first thing a foreigner has to do, a part from getting the NZ work visa in the first place, in order to land work in New Zealand is apply for an IRD number. This is akin to a Social Insurance Number in Canada, or Social Security Number for Americans. I came to NZ through the IEP/SWAP prgramme, and they provided me with the form I needed. You can get yours here (the link to the actual form is on the sidebar, but you should read the entire page for important information).

Once completed, you can submit it online via that page, or take it into an NZAA location along with photocopies of your passport, work visa and driver’s license (if you come from an English-speaking country you can use that, otherwise you will need an International Driver’s License). It will take 8-10 business days to process, and it’s important that you not bill any work prior to the number being issued. If you do, the government will charge you 40% income tax as opposed to 20% — or so I was told at my IEP orientation meeting. Ive yet to confirm this, so Im not sure if this is accurate. Better to err on the side of caution, and hold off on billing a few weeks than be surprised unpleasantly!

Step two: Understanding New Zealand’s GST

GST numbers? I thought I left that behind in Canada (or, do I need one?)!

As a freelancer, Im responsible for maintaining and filing my own taxes, something which is a little ironic considering the state of my Canadian taxes (I’ll have to hire an accountant when I get home to sort it all out).

You will have to file for a GST number and pay your taxes if your income “is expected to go over $40,000 for the next 12 months. This equates to $3,333 per month. If your turnover is $3,333 per month and you expect to maintain that level all year, you’ll need to register for GST.” You can also choose to register if your income is less than $40k, that is called “voluntary registration“. It’s important that you figure out how much you expect to earn throughout the year ASAP, because if you’re required to register for GST, you must apply within 21 days of becoming liable, and the IRD may may charge penalties if you fail to register in time.

Being an advertising-based web developer, Im reasonably certain that my income will exceed 40k over the next year. In fact, the only way I wouldnt clear that is if I chose NOT to work in my trained field, or chose to spend half the year travelling. Since Im not sure what the year will bring, I’m going to register for the number, making sure to have all my bases covered. That means that starting immediately, I will have to charge clients 12.5% GST on top of my fee when I submit my invoices.

Business Industry Description and Code

Now that Ive determined that I need to register for a GST number, I will need find out what my “accurate” business industry description and 6-digit business code are.

First, I went to the Business Industry Description and Code website and searched for “web”. This returned a number of results, including “Internet web site design service” with a further description of “Computer Systems Design and Related Services”. That sounds about right (although Im a developer, not a designer), so Ive gone with that. So for the record:

• Business industry code: 783411 (Internet web site design service)
• CU code: 78340
• CU description: Computer Systems Design and Related Services

Choosing an accounting basis

Now that I’ve that sorted, I need to decide how I will claim and charge GST. After reading through all of the options, Ive determined that Im going to go with the “payment basis”, as the others seemed too convoluted for my purposes. As a freelance web developer, Im not buying supplies or paying GST on anything; Im only charging it on work that I do. If I later decide that this is the wrong basis, I can change it by writing to the IRD.

Choosing an taxable period

You can choose to pay your taxes one of three ways: monthy, every two months (which is the standard), and every six months. For simplicity’s sake, Im going to go with every two months. To make things more interesting, you then must choose one of two time periods to file.

Although I will be leaving New Zealand in November 2009, I plan to spend October travelling (either here or in Asia, still undecided), I don’t intend to be working much past the end of September. So,
Im going to choose “the two month period ending on the last day of January, March, May, July, September and November”. Again, this can be changed by writing the IRD if I change my mind.

Registering for a GST number

I’m all set to register now, but Im going to wait a few days before doing so. Because Im unsure of NZ taxation practice, Im going to get a Kiwi to look over what Ive written here and ensure Ive got it all sorted correctly. Im not positive I’ve caught everything I need to, so until then I’m going to wait until Ash (who freelances and so is ideal person to ask) gets back from out of town (assuming he’ll want to read through all of this lol). Once Im given the go-ahead, I’ll file online and be ready to go.

Business banking

I’ve already written about opening a bank account here, so I won’t get into all of that. My plan for now, is to open a savings account to funnel 10% savings in, and a second savings account to store the 12.5% GST in before having to send it to the government Im unsure if that is the best way to go about it, so once I have my GST number, I will go into my bank and talk to them about what my options are. I may need the secondary savings account to actually be a business account. We’ll see! UPDATE: YOU WILL ALSO NEED TO RESERVE A MINIMUM 20% FOR YOUR IRD TAX. From what Ive gathered, you include this in your rate to your client. So a $1000 website would include $200 for the IRD. The GST is charged on top of this.

Finding work

Now onto the fun stuff: finding work! As a web developer, I was pretty certain that I wouldn’t have any trouble finding work in New Zealand. My skills are highly transferable, and since I come with excellent recommendations (if I do say so myself, lol), I thought it would be easy-peasy, and it was!

I have to admit, at first I was a bit nervous about things as all of the jobs that I found online were for postings in Wellington or Christchurch. Webdev and advertising, it seemed, didn’t really live in Auckland. About a week after arriving, I stayed up late one night and cold-called (emailed, really) about a dozen agencies that I found through Google (search terms: Auckland, web, webdev, web design, advertising), introducing myself to them and sending my updated CV and website.

A word of advice: get yourself a cellphone as soon as you can. While everthing is done online in Toronto, here in NZ almost nothing is, with companies prefering to speak to you on the phone.

Unfortunately, none of those emails garnered any work, although I was able to get the name and contact info of a few head hunters; information I wouldnt have had otherwise. I also registered with Aquent, although so far Ive not heard a peep out of them. Maybe your luck will be different, but I’ve heard from other creatives who’ve been here that Aquent wasn’t very helpful for them either.

[12.17.2008 UPDATE: Late last week I received a phone call from the manager of the Auckland Aquent office. She had heard from someone in their Boston office who had read my entry, and wanted to follow up with me. She apologized that no one had responded, and explained that as there were only a small handful of people in the office here, it takes a while longer than ideal for people to be contacted. We had a great chat, and I did go on to say that to be fair I hadn't followed up on the electronic submission of my CV as I found a few contracts straightaway. Tentative plans were made for me to go into their office in the new year for a more formal follow-up should I find myself needing work.]

I’m very fortunate that I landed in Auckland with a bit of a social scene waiting for me. My friends sent out my CV to their friends, and in the end it was through that method (a friend of a friend of a friend) that I landed my foot in the door at a few well-known advertising agencies. So network! I think the old adage of “it’s not what you know, it’s who you know” is very much alive and well here in Ak City as one of the contracts Ive landed was with an agency who’d told me that they had no work for me when I cold called them.

In fact, I would strongly recommend printing up a small batch of business cards once you have your NZ address and cellphone (and website! No webdevver should be without one) to hand out to people you meet. In the past week Ive met people who work in all sorts of places here in Auckland that say they think their companies are hiring web developers. Because Ive not had business cards, I’ve had to rely on saying “oh you’re on so-and-so’s Facebook, we’ll get in touch that way”. Hardly reliable, hardly professional (although I did meet these people in social situations, so Ive a little leeway here).

Websites referenced in this entry

IRD Number Application
IEP Working Adventures Worldwide
SWAP Canada
New Zealand Automobile Association
New Zealand GST
Business Industry Description and Code
Westpac tax and business banking information
Trade Me — Jobs

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Again, this entry is really more for my benefit than anyone else’s, but if my research can help someone else, awesome. The topic is far from finished, and I will be adding subsequent entries as I go along.

I know this was probably of very little interest to folks back home (sorry guys!), I promise the next one will be more exciting.

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