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5.17 Calculating Earnings from Self-employment

Last amended 
16 August 2017

The method to calculate earnings from self-employment is used for both NE/NWE and AE (actual earnings/able to earn). There are multiple methods to calculate earnings from self-employment and discretion should be used to pick the method that best represents the person’s earnings.  The same method should be used to calculate both the person’s NE/NWE and the person’s AE. See section 8.6.

5.17.1 Unearned income is not to be included in NE/NWE

Any income the person may be receiving purely from the application of their capital, i.e. bank interest, purchase of an 'allocated pension', interest from a managed investment fund, capital gains from property etc. cannot be included in the calculation of NE/NWE (or AE). Only taxable income which can be attributed to the client's mental or physical labour can be considered.