TDS On Contractor Payment Calculator

Work out tds on contractor payment instantly with clear inputs, formula shown and shareable results.

About TDS On Contractor Payment Calculator

Payments to contractors attract deduction at a low rate that differs by the payee's legal form, once a single payment or the annual aggregate crosses the threshold. The deducted amount is a credit for the contractor, not an extra cost.

Formula

Contractor TDS

TDS = payment × (1% individual / 2% company) once the threshold is crossed

Worked example

With the default values below, TDS On Contractor Payment Calculator returns Tax To Deduct of $5,000.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Payment To Contractorminimum 0: 500,000
Contractor Typeone of Individual or sole trader (1%), Company or firm (2%): Individual or sole trader (1%)
Single Payment Thresholdminimum 0: 30,000

Results

Tax To Deduct: $5,000.00
Net Payment To The Contractor: $495,000.00
Rate Applied: 1.00%
Threshold Test: Threshold crossed — deduction applies

Step by step

1Values used
2Contractor TDS
3Tax To Deduct= 5,000.00
4Net Payment To The Contractor= 495,000.00
5Rate Applied= 1.00
6Threshold Test= Threshold crossed — deduction applies

Assumptions and limits

The result is derived only from the 3 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax, fees or charges or compounding frequency into account.
Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
Tax figures are estimates based on the rates, caps and thresholds you enter. Real rules differ by jurisdiction and change every year, and personal circumstances alter the outcome. This is not tax or financial advice — confirm with a qualified adviser.
This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Tax figures are estimates based on the rates, caps and thresholds you enter. Real rules differ by jurisdiction and change every year, and personal circumstances alter the outcome. This is not tax or financial advice — confirm with a qualified adviser.

Frequently Asked Questions

Does the aggregate matter as well as single payments?

Yes. Both a single-payment and an annual-aggregate threshold apply, and crossing either triggers deduction.

What if material and labour are billed together?

Deduction is generally on the gross invoice unless material value is separately identified in the contract.