If you’ve recently started a business in New Zealand, GST is one of those things that can feel confusing fast. You might be hearing about the $60,000 threshold, registration rules and IRD requirements and wondering when it actually applies to you.
This guide breaks it down simply so you know exactly when you need to register for GST in NZ, what the $60,000 rule means, and what to do next.
What is GST in New Zealand?
GST (Goods and Services Tax) is a 15% tax added to most goods and services in New Zealand.
If your business is GST-registered, you:
- Charge GST on what you sell
- Claim GST back on business-related expenses
- Pass the difference on to Inland Revenue (IRD)
GST isn’t optional once you’re registered so knowing when to sign up is important.
The $60,000 GST Threshhold
In New Zealand, you must register for GST if your total turnover exceeds $60,000 in any 12-month period. Turnover is the total sales/revenue of a business and does not include any expenses or costs.
A key detail many people miss is that this isn’t based on the calendar or financial year — it’s a rolling 12-month period.
For example:
- If your business earns around $5,000 per month, you’ll reach $60,000 within 12 months
- Once you go over the threshold, you must register within 21 days
Even going slightly over can trigger the requirement, so it’s important to track your income regularly.
Do you have to register as soon as you start a business?
Not necessarily. You only need to register if you expect to earn more than $60,000 in the next 12 months. If you’re just starting out and your income is below this, GST registration is optional.
Voluntary GST registration (even if you’re under $60k)
Some businesses choose to register for GST before they reach the threshold.
This can be helpful if:
- You have high startup costs
- You want to claim GST on business expenses
- You work mainly with other GST-registered businesses
However, it also means:
- You’ll need to charge GST on your prices
- Your admin and bookkeeping will increase
- You must file GST returns regularly
We understand that every industry has unique financial challenges, which is why we offer customised solutions for business accounting, tax planning, cashflow management, GST returns, and business growth strategies.
It’s worth weighing up whether the benefits outweigh the extra compliance.
Who needs to register for GST?
GST registration applies to a wide range of business structures, including:
- Sole traders
- Freelancers and contractors
- Companies
- Partnerships
In some cases, it may also apply to rental or property-related income if it meets GST criteria e.g. short-term accommodation like Airbnb.
If you’re unsure, it’s worth checking your turnover and business activity carefully.
What happens if you don’t register on time?
If you exceed the $60,000 threshold and don’t register, IRD can backdate your GST registration.
That means you could:
- Owe GST on past income (even if you didn’t charge it)
- Face penalties or interest
This is why keeping an eye on your income is so important — GST issues often come down to timing.
How to register for GST in New Zealand?
You can register for GST through your IRD myIR account.
You’ll need:
- Your IRD number
- Business details
- An estimate of your turnover
When registering, you’ll also choose how often you file GST returns:
- Monthly
- Two-monthly (most common) We recommend this option for new businesses, as it helps establish good habits around filing and paying GST on time while making cash flow easier to manage.
- Six-monthly (simpler for smaller businesses)
Once registered, you’ll start charging GST from your effective registration date.
How GST affects your pricing
Once you’re GST-registered, your pricing needs to account for GST.
For example:
- A $100 service becomes $115 including GST
You’ll need to decide whether:
- Your prices stay the same (absorbing GST), or
- You increase prices to include GST on top
This is an important step many businesses overlook when registering.
Common GST mistakes New Zealand businesses make
A few common mistakes include:
- Missing the 12-month rolling rule
- Forgetting to set aside GST collected
- Claiming expenses incorrectly E.g. claiming GST on purchases from overseas suppliers, where no New Zealand GST has been charged.
- Registering too late and needing to back pay GST
These issues are avoidable with regular bookkeeping via Xero.
Final thoughts
GST doesn’t have to be complicated, but it does need to be managed properly from the start.
Understanding the $60,000 threshold and keeping an eye on your income can help you avoid surprises, penalties, and unnecessary stress.
If you’re unsure whether you should register yet, it’s always worth reviewing your numbers regularly — or speaking with a bookkeeper or accountant who can guide you.
Keen to know how we handle our GST work?
Our process is designed to ensure accuracy, IRD compliance and stress-free GST filing for your business. We take care of every step — from reconciling your accounts in Xero to reviewing key transactions, calculating GST obligations, and filing directly with Inland Revenue on your behalf.
Our structured GST return process helps clients stay compliant, avoid common GST errors, and improve cash flow management throughout the financial year.
These are the conversations we have with clients and our processes:
- Set aside GST regularly: We recommend having a separate bank account suffix where a percentage of business income is transferred weekly to help cover upcoming GST payments and improve cash flow management.
- Keep accurate GST records: As part of our GST return review process, we check copies of invoices for the five largest transactions, as these are commonly reviewed by the IRD during a GST audit or GST review.
- Upload supporting documents into Xero: For larger business expenses and asset purchases, we encourage clients to upload invoices directly against transactions in Xero to maintain accurate bookkeeping records and simplify compliance.
- Claim GST correctly on overseas freight: For businesses exporting products internationally, we ensure GST is only claimed on the New Zealand portion of freight charges shown on NZ Post invoices, as overseas freight is generally GST-free.
- Claim the full GST amount on financed assets: When a business asset is purchased using finance or a loan, we ensure GST is claimed on the total purchase price of the asset — not just the deposit or loan repayments — helping clients maximise their GST claim correctly.
Need Help
Need help staying on top of GST, cashflow and your bookkeeping without the stress? Contact ANCA Accounting Solutions today.
Explore how we support NZ businesses with clear, simple financial systems that keep you compliant year-round. Contact Anca Accounting Solutions today to discuss we can support your business.