Yes - that $1 would be income. So depending on your profit you may need to pay tax on it or you may not.
I would declare $10 income, $9 expense and $1 profit. You could just keep the paypal receipt as proof of payment to the other party.
The main question I have in my mind if you are handling
money on behalf of someone else that makes you a financial service provider (FSP). You might like to see -
https://www.business.govt.nz/fsp/abo...rvice-provider
The rules in there can be a bit tricky to navigate but essentially you just need to pay some $'s and have a disputes resolution scheme (DRS) in place . Those both will cost you around $3k to complete.
Generally speaking financial transactions are GST exempt. However - if you are providing a service then it might not be. You need a good written advice from an accountant on this.
Also if you are handling $'s on behalf of someone else and it is deemed a financial transaction you will also need to complete Anti-Money Laundering compliance too!