GST and business tax questions, answered

AIM vs Standard Provisional Tax Calculator NZ 2026/27

What is the difference between AIM and the standard uplift method?

The standard uplift method fixes your provisional tax instalments to last year's residual income tax plus 105% or 110%, paid in three instalments regardless of how this year actually turns out. AIM (the Accounting Income Method) calculates each payment from your actual accounting profit as the year progresses, so instalments rise and fall with your real results instead of last year's figure.

Does AIM change how much total tax I pay?

No. Both methods are simply ways of paying the same year's income tax bill in instalments rather than as one lump sum. AIM and standard uplift can produce different instalment amounts and timing, but your final tax liability for the year is settled the same way either method is used, through your end of year tax return.

Do I need special software to use AIM?

Yes. AIM is only available if you keep your accounting records in software that Inland Revenue recognises as AIM-capable. The software calculates your provisional tax payment from your actual income and expenses each period. Without compatible, up-to-date bookkeeping, AIM is not practical to use correctly.

Which method protects me from use of money interest?

Under the standard uplift method, paying the correct uplift amount by each due date generally protects you from use of money interest even if your actual tax bill ends up higher. Under AIM, because each payment is based on your real accounting income at the time, you are not building up a hidden shortfall, so use of money interest risk is minimal if the software is used correctly and payments are made on time.

Can I switch from standard uplift to AIM partway through the year?

You generally need to elect into AIM through compatible software from the start of an instalment period, rather than switching mid-instalment. If you are considering a change, talk to your accounting software provider or tax agent about the earliest period you can move onto AIM.

What if my income has dropped a lot this year?

If your profit has fallen well below last year's, standard uplift instalments (based on last year's higher figure) can mean overpaying during the year, with the excess refunded after your return is filed. AIM would track the lower actual profit as you go, so you would not tie up that cash in the meantime. The estimation method is another option that lets you lower your standard instalments based on a revised forecast.

Is AIM available to companies as well as sole traders?

Yes. AIM is open to companies, trusts, partnerships and sole traders that keep their accounting records in AIM-capable software. It is not restricted to any one business structure, though it suits taxpayers with organised, current bookkeeping best, since the calculation depends on accurate period-by-period figures.

What if my prior year residual income tax was $5,000 or less?

If your residual income tax for the prior year was $5,000 or less, you are not required to pay provisional tax at all under either method. You simply pay your full tax liability as terminal tax after the year ends, so comparing AIM and standard uplift is not necessary in that situation.

Contractor True Cost Calculator NZ 2026/27

What does the true cost of contracting mean?

Going from employment to contracting does not just change how you are taxed. It removes several benefits your employer currently funds without you noticing: paid annual leave, paid sick leave, paid public holidays, an employer KiwiSaver contribution, and the ACC Work Levy your employer covers on your behalf. This calculator adds up the dollar value of those five items at your income level, so you can see exactly what you are giving up each year, in dollars and as a percentage of income.

How many days of paid annual leave do New Zealand employees get?

New Zealand employees are entitled to a minimum of four weeks, or 20 working days, of paid annual leave a year under the Holidays Act 2003. As a contractor, any time you take off is unpaid unless you build the cost into your rate.

Why does this calculator default to 5 sick days rather than the full entitlement?

The statutory minimum sick leave entitlement under the Holidays Act 2003 is 10 days a year once an employee has worked for the same employer for six months. This calculator defaults to 5 days to reflect a realistic year of actual sick leave use, since most employees do not use their full entitlement every year. You can change the figure to 10 to model the full entitlement, or to your own expected usage.

Why 12 public holidays rather than 11?

New Zealand has 11 national public holidays: New Year's Day, the day after New Year's Day, Waitangi Day, Good Friday, Easter Monday, Anzac Day, King's Birthday, Matariki, Labour Day, Christmas Day and Boxing Day. Most employees also get a twelfth paid day off on their region's Anniversary Day, so this calculator uses 12 days as the realistic figure for most employees.

How much is the 3.5% employer KiwiSaver contribution worth?

From 1 April 2026, the minimum employer KiwiSaver contribution is 3.5% of gross salary. On a $90,000 salary that is $3,150 a year that your employer adds on top of your pay, with no equivalent for a contractor unless they set it aside themselves from their own income.

Why does ACC cost more for contractors than for employees?

Employees pay only the ACC Earners' Levy, 1.75% of earnings capped at $156,641, which is deducted through PAYE. Their employer separately pays the ACC Work Levy, a cost the employee never sees on their payslip. Contractors and other self-employed people must pay the Work Levy themselves in addition to the Earners' Levy, and the rate depends on their industry classification, from under 0.4% for low-risk office-based work to 3% or more for higher-risk trades. This calculator lets you choose an approximate rate for your industry.

Does this figure tell me exactly what to charge as a contract rate?

Not directly. This calculator shows the dollar value of what you give up, not the day or hourly rate you need to charge to replace it. Add this annual figure to your target income, then divide by your expected billable days, to see the effect on your rate. For a full side-by-side comparison of net take-home pay under each option, including income tax and GST, use the Contractor vs Employee Calculator.

Is this the same as the Contractor vs Employee Calculator?

No. The Contractor vs Employee Calculator compares full net take-home pay under both options, including income tax, ACC, GST and business expenses, and works out a break-even contract rate. This calculator has a narrower focus: it isolates and quantifies just the value of the benefits you lose, in dollars and as a percentage of income, without the full tax comparison.

Entertainment Expense Calculator NZ 2026/27

What entertainment expenses are 50% deductible in New Zealand?

Entertainment with a significant private or social element is 50% deductible. This includes meals and drinks with clients, suppliers or business contacts, staff social functions such as Christmas parties, corporate boxes or hospitality suites at sporting or cultural events, use of a company holiday home or bach, pleasure craft such as a launch or yacht, and gifts of food or drink such as wine or a hamper. The 50% limit applies regardless of how business-focused the occasion felt.

What entertainment expenses are 100% deductible in New Zealand?

Entertainment that is genuinely incidental to running the business is 100% deductible. This includes light refreshments such as morning tea or working-lunch sandwiches consumed on business premises during work hours, food and drink at a conference or training course lasting four hours or more, meals an employee buys while travelling alone on business with no client present, entertainment offered to the general public in the ordinary course of business, and any entertainment enjoyed entirely outside New Zealand.

How do I calculate the deductible amount of an entertainment expense?

Extract the GST from the GST-inclusive cost using the 3/23 fraction to find the GST-exclusive amount, then multiply that GST-exclusive amount by 50% or 100% depending on the category. For example, a $460 client dinner has a GST-exclusive cost of $400. As client meals are 50% deductible, the deductible amount is $200 and the non-deductible amount is $200.

Can I claim GST on entertainment that is only 50% deductible?

Yes, but only on the deductible half in the long run. Most businesses claim the full GST input tax credit at the time of purchase, then make a single adjustment once a year to pay back the GST attributable to the non-deductible 50%. On a $460 dinner with $60 of GST, the adjustment is $30, leaving $30 of GST actually retained, matching the 50% income tax deduction.

When do I make the GST adjustment for entertainment expenses?

Inland Revenue requires GST-registered businesses to total up the GST claimed on 50% deductible entertainment across the year and make one adjustment in the GST return that coincides with the end of the income tax year, rather than adjusting every individual invoice. This is recorded as an entertainment expenditure adjustment on the GST return and cannot itself be claimed as an income tax deduction.

Are staff Christmas parties 50% or 100% deductible?

Staff Christmas parties and similar social functions are 50% deductible, whether held on or off business premises. The social and private element of the occasion triggers the 50% limitation. Supporting costs such as venue hire, catering staff and glassware hire for the same function are also 50% deductible.

Why is a meal while travelling alone 100% deductible but a client dinner is only 50%?

A meal an employee eats alone while travelling on business is treated as a necessary cost of being away from home, not entertainment, so it is 100% deductible. As soon as a client, supplier or other business contact joins that meal, it becomes entertainment with a hospitality element and drops to 50% deductible, even if the discussion is entirely business.

Does the 50% rule apply if I am not GST-registered?

Yes. The 50% income tax deduction limit applies whether or not you are GST-registered. The only difference is that a non-GST-registered person cannot claim any GST input tax credit, so the full GST-inclusive cost is used as the starting figure, with 50% or 100% of that total figure being deductible.

NZ GST Calculator

What is the GST rate in New Zealand in 2026?

The standard GST rate in New Zealand is 15%. It has been 15% since 1 October 2010, when it was increased from 12.5%. The rate is unchanged for the 2026/27 tax year.

How do I add GST to a price in New Zealand?

Multiply the GST-exclusive price by 1.15. For example, $500 plus GST is $500 x 1.15 = $575, of which $75 is the GST component.

How do I remove GST from a total (reverse GST calculation)?

Divide the GST-inclusive total by 1.15. For example, $575 divided by 1.15 is $500 GST-exclusive, with $75 of GST. Do not subtract 15% from the total, which gives an incorrect result.

What is the IRD 3/23 method for extracting GST?

The IRD 3/23 fraction extracts the GST component from a GST-inclusive total. Multiply the total by 3 and divide by 23. For $115 GST-inclusive, the GST is $115 x 3 / 23 = $15. This method is mathematically equivalent to dividing by 1.15 and subtracting, and is the approach prescribed by Inland Revenue in Tax Information Bulletins.

Do I have to register for GST in New Zealand?

You must register for GST with Inland Revenue if your taxable turnover exceeds $60,000 in any 12-month period (rolling, not a financial year). You may register voluntarily below that threshold. The threshold is set under section 51 of the Goods and Services Tax Act 1985.

How often do I file a GST return?

GST-registered businesses file monthly, two-monthly, or six-monthly depending on turnover and their chosen filing cycle. Most small businesses file every two months or every six months. Returns and payments are due on the 28th of the month following the end of the GST period, with the exception of the periods ending 30 November (due 15 January) and 31 March (due 7 May).

Is GST charged on imports into New Zealand?

Yes. Since 1 December 2019, GST applies to all goods imported into New Zealand. For goods over $1,000, NZ Customs collects GST at the border using the formula (Customs value + freight + insurance + duty) x 15%. For goods under $1,000, overseas sellers registered with Inland Revenue collect GST at the point of sale.

What is the difference between zero-rated and GST-exempt supplies?

Zero-rated supplies (such as exported goods) are charged at 0% GST, but the seller can still claim GST on related business expenses. Exempt supplies (such as residential rent and most financial services) have no GST charged, and the seller cannot claim GST on related expenses.

GST Filing Frequency Calculator NZ 2026/27

What are the GST filing frequency options in New Zealand?

New Zealand has three GST filing frequencies: monthly, two-monthly, and six-monthly. Two-monthly is the default frequency Inland Revenue applies when you register. Six-monthly is available if your taxable turnover is $500,000 or less in a 12-month period. Monthly is optional for smaller businesses and compulsory once turnover exceeds $24 million in a 12-month period.

Can I choose six-monthly GST filing?

Yes, if your taxable turnover does not exceed $500,000 in a 12-month period. Six-monthly filing means only two GST returns a year, which suits small businesses with straightforward, low-volume transactions that typically owe rather than receive GST.

When does monthly GST filing become compulsory?

Monthly filing becomes compulsory once your taxable turnover exceeds $24 million in any 12-month period, under sections 15 and 15B of the Goods and Services Tax Act 1985. Below that threshold, monthly filing is optional and can be chosen by any registered business.

Does my cashflow position matter, or is it just about turnover?

Turnover sets which frequencies you are legally allowed to use. Cashflow decides which of those eligible options actually suits you. Businesses that regularly receive GST refunds, such as exporters or those with large capital purchases, often prefer to file more frequently so that cash comes back sooner. Businesses that typically owe GST often prefer to file less frequently, holding the GST they have collected for longer before paying it over.

Can I change my GST filing frequency later?

Yes. You can apply to Inland Revenue through myIR to change your filing frequency at any time. The change generally takes effect from the start of your next taxable period, and you must still meet the turnover eligibility for whichever frequency you choose.

What is the difference between filing frequency and accounting basis?

Filing frequency is how often you submit a GST return: monthly, two-monthly, or six-monthly. Accounting basis is how you recognise GST on a transaction: invoice, payments, or a hybrid basis, a separate choice governed by section 19 of the GST Act 1985. You can hold any accounting basis alongside any eligible filing frequency.

Is two-monthly the default when I register for GST?

Yes. Two-monthly is the standard frequency Inland Revenue applies when you register for GST, unless you specifically request six-monthly or monthly filing and are eligible for it.

Can I file more often than my turnover requires?

Yes. Any GST-registered business can choose to file more often than its turnover strictly requires. A small business under $500,000 turnover could still choose monthly filing if it wanted more regular visibility of its numbers, or if it usually received GST refunds.

GST Registration Threshold Calculator NZ 2026/27

What is the GST registration threshold in New Zealand?

The threshold is $60,000 of taxable turnover in any rolling 12-month period. Once you exceed it, retrospectively or prospectively, registration with Inland Revenue is compulsory under section 51 of the Goods and Services Tax Act 1985.

What is the difference between the retrospective and prospective test?

The retrospective test looks backward: if your taxable turnover for the past 12 months already exceeds $60,000, you must register. The prospective test looks forward: if you have reasonable grounds to expect your turnover will exceed $60,000 over the next 12 months, you must register now, even before you have actually earned that much.

Does the $60,000 threshold reset every financial year?

No. It is a rolling 12-month test, not tied to the 31 March financial year. You can breach the threshold at any point during the year, and once you do, the obligation to register does not go away even if turnover later drops.

Should I register for GST voluntarily below $60,000?

It depends. Voluntary registration is often worthwhile if you have significant GST-bearing business expenses to claim back, or if most of your customers are GST-registered businesses who can claim the GST you charge. It suits you less if most customers are private individuals who cannot claim GST back, since your prices effectively rise by 15%.

What counts toward the $60,000 taxable turnover figure?

Standard-rated sales and zero-rated supplies such as exports count. Exempt supplies (residential rent, most financial services), one-off sales of capital assets, wages, and private transactions do not count toward the threshold.

What happens if I do not register when I should have?

Inland Revenue can backdate your registration to the date you should have registered and assess GST on all taxable supplies from that date, even though you did not charge customers at the time. Shortfall penalties and use of money interest can also apply.

Can I use this calculator if my business has no trading history yet?

Yes. Use the steady monthly turnover field to see your annualised run-rate and how many months it would take to reach $60,000 in cumulative turnover, which helps you plan ahead even before you have 12 months of figures.

Is the $60,000 figure GST-inclusive or GST-exclusive?

GST-exclusive. The $60,000 threshold is measured on taxable turnover before any GST is added, because GST is not chargeable until you are registered.

Home Office Apportionment Calculator NZ 2026/27

What is the IRD square metre rate for the 2026 income year?

The standard square metre rate for the 2026 income year (1 April 2025 to 31 March 2026) is $57.30 per square metre, set by Inland Revenue under section DB 18AA of the Income Tax Act 2007. It reflects a 3.1% increase in the Consumers Price Index for the twelve months to March 2026, applied on top of the underlying 2019 Household Economic Survey utility-cost data. The 2025 income year rate (1 April 2024 to 31 March 2025) was $55.60.

How do I work out my home office deduction using floor-area apportionment?

Divide the floor area of the room or space used mainly for business by your home's total floor area to get a work-space percentage. Apply that percentage to your apportionable household costs, such as mortgage interest, rates, rent, power and insurance, to find your deductible amount. A 15 square metre office in a 150 square metre home is a 10% work-space share.

What is the difference between the square metre rate method and the actual cost method?

The actual cost method apportions every household running cost, power, insurance, minor repairs and similar, by your work-space percentage, and requires you to keep invoices and receipts. The square metre rate method replaces that apportionment with one flat rate, $57.30 per square metre for the 2026 income year, multiplied by just the area of your home office, with no bills to track. Either way, premises costs, mortgage interest, rates and rent, are apportioned by floor-area percentage separately; they are never part of the square metre rate itself.

Do I still have to apportion mortgage interest, rates and rent if I use the square metre rate?

Yes. The square metre rate covers day-to-day running costs like power, insurance and minor repairs only. It does not include mortgage interest, rates or rent. You still calculate the business share of those premises costs by multiplying them by your work-space percentage, whichever method you use for running costs.

Can employees claim a home office tax deduction in New Zealand?

Generally no. The square metre rate and floor-area apportionment rules are for self-employed people, sole traders, and businesses, including close companies reimbursing a shareholder-employee, using part of a home for the business. An employee earning salary or wages cannot personally claim a home office deduction on their own tax return. Instead, under Determination EE004, an employer can choose to pay an employee up to $20 a week tax-free for working-from-home costs, plus up to $7 a week for personal telecommunications tools and usage plans, without needing receipts, but that is the employer's decision, not something the employee claims themselves.

Do I need to keep records if I use the standard square metre rate?

Yes, some records are still required. You need evidence of your home office and total floor areas, and invoices or statements for whatever premises costs, mortgage interest, rates or rent, you are apportioning, since those are calculated separately from the flat rate. You do not need to keep every power or insurance bill under the square metre rate method, which is its main practical advantage over the actual cost method.

Can a company use the square metre rate method?

A company can only deduct home office costs if it reimburses the shareholder-employee for the business use of their home, and keeps accurate records showing how and when that reimbursement was calculated and paid. The square metre rate can be used as the basis for that reimbursement calculation, in the same way a sole trader would use it directly.

Which method gives the bigger deduction?

It depends on your actual running costs relative to your office's area. If your real power, insurance and running costs per square metre of office space are higher than the standard rate, the actual cost method usually gives a bigger deduction, provided you keep the records to support it. If your real costs are lower, or you would rather avoid tracking every bill, the standard square metre rate is usually simpler and can still give a similar or better result. Use this calculator to compare both for your own numbers.

Provisional Tax Due Date Calculator NZ 2026/27

When is provisional tax due if I have a standard 31 March balance date?

For most New Zealand individuals, sole traders and small companies with a 31 March balance date, using the standard or estimation method and filing GST two-monthly or monthly, the three instalments are due 28 August, 15 January and 7 May. Terminal tax follows on 7 February the next year, or 7 April with a tax agent.

How many provisional tax instalments do I pay if I file GST six-monthly?

Six-monthly GST filers pay provisional tax in two instalments instead of three, timed to line up with their GST due dates. For a standard 31 March balance date these fall on 28 October and 7 May.

What if my income tax balance date is not 31 March?

Inland Revenue generally sets instalment due dates on the 28th day of the 5th, 9th and 13th month after the start of your income year, with two exceptions: a due date that would fall on 28 December moves to 15 January, and one that would fall on 28 April moves to 7 May. This calculator applies that general rule to any balance date you enter. Always confirm your exact dates in myIR, since Inland Revenue sets some non-standard schedules individually.

Does using a tax agent change my due dates?

A tax agent does not change your provisional tax instalment dates, but it can extend your terminal tax due date. For a 31 March balance date, terminal tax is due 7 February without a tax agent, or 7 April with one, provided you are linked to the agent in myIR by the relevant date.

What happens if a due date falls on a weekend or public holiday?

If an instalment or terminal tax due date falls on a weekend or public holiday, a payment made on the next working day is treated by Inland Revenue as paid on time.

Do I have to pay provisional tax at all?

You only need to pay provisional tax if your residual income tax for the prior year was more than $5,000. Below that threshold you are in the safe harbour, and you simply pay your full tax bill as terminal tax after the year ends.

What is the difference between an instalment date and the terminal tax date?

Instalment dates are the dates you pay provisional tax during the year, as prepayments towards your income tax bill. The terminal tax date is when you settle up: you pay any shortfall, or receive a refund, once your actual tax liability for the year is known.

Where can I find my exact due dates if my balance date is unusual?

Log into myIR and check the provisional tax section of your account, which lists your specific due dates, or ask your tax agent. Inland Revenue calculates some non-standard balance date schedules individually rather than by the general rule.

Provisional Tax Method Comparison Calculator NZ 2026/27

What are the four ways to pay provisional tax in New Zealand?

New Zealand has four provisional tax methods: standard uplift, paying 105% or 110% of your prior year's residual income tax in three instalments; estimation, paying tax based on your own estimate of this year's income; the ratio method, paying a percentage of your GST taxable supplies each two-monthly period, for eligible GST-registered businesses; and AIM, the Accounting Income Method, paying tax on your actual accounting profit each period through approved software. Most taxpayers use standard uplift by default unless they actively choose another option.

How does the standard uplift method work?

Under standard uplift you pay 105% of your prior year's residual income tax (RIT) if that year's return was filed before your first instalment date, or 110% of the RIT from two years prior if it was not, which commonly applies to clients of a tax agent with an extension of time to file. The total is split into three equal instalments, generally due 28 August, 15 January, and 7 May for a standard 31 March balance date.

When should I use the estimation method instead of standard uplift?

The estimation method suits you when this year's income is clearly lower than last year's, for example after losing a major client or reducing your hours. You pay tax on your own estimate rather than an uplift on last year's higher figure, which reduces your instalments. The risk is use of money interest if your estimate turns out to be too low, so only estimate below the standard uplift amount if you are confident in the forecast.

Who is eligible to use the ratio method?

Broadly, you need to have been in business and GST-registered for the whole of the prior income year, have a residual income tax between $5,000 and $150,000 for that year, file GST returns monthly or two-monthly, and not operate as a partnership. Inland Revenue calculates and notifies your specific ratio percentage, which you then apply to your GST taxable supplies each period.

What is the AIM method and who is it for?

AIM, the Accounting Income Method, lets you pay provisional tax based on your actual accounting profit for each period, calculated through Inland Revenue approved software such as Xero or MYOB. It suits small businesses with fluctuating or seasonal income and regular bookkeeping, since payments track real profit rather than an estimate or last year's figure, and use of money interest does not apply if the software is used correctly.

What is the difference between the $5,000 provisional tax threshold and the $60,000 safe harbour?

The $5,000 threshold decides whether you must pay provisional tax at all: if your prior year's residual income tax was $5,000 or less, no provisional tax is required. The $60,000 safe harbour is a separate, later test: if you use the standard uplift method, pay on time, and your actual residual income tax for the year turns out to be under $60,000, Inland Revenue will not charge use of money interest on any shortfall, even if your final tax bill is higher than what you paid through the year.

Can I switch provisional tax methods during the year?

Yes. You can move between methods during the year, for example switching from standard uplift to estimation if your income drops partway through, though you should keep records supporting any change. Switching to or from the ratio method or AIM has its own application process with Inland Revenue and generally needs to align with a GST period.

What happens if I choose a method and end up underpaying?

If you underpay provisional tax, whichever method you used, Inland Revenue charges use of money interest on the shortfall from the relevant due date until it is paid. The standard uplift method has the strongest built-in protection, since paying the correct uplift amount on time avoids interest in most cases if your final tax turns out to be under $60,000. Estimation and, to a lesser extent, the ratio method carry more risk if your figures turn out to be understated.

Sole Trader vs Company Tax Calculator NZ 2026/27

Is it better to be a sole trader or set up a company in New Zealand?

It depends on your profit level and what you do with the money. As a sole trader, all your profit is taxed every year at your personal marginal rate, up to 39%. A company only pays 28% on the profit it keeps, so if you regularly leave money in the business to reinvest, a company can defer tax at a lower rate. If you draw out all the profit every year, the two structures end up close to level once imputation credits are applied, and the company adds compliance costs on top. There is no single right answer for everyone.

What tax rate does a company pay in New Zealand?

New Zealand companies pay a flat 28% income tax rate on their profit, regardless of size, under the Income Tax Act 2007. There are no company tax brackets. This compares with personal income tax, which is progressive and rises to 39% on income over $180,000.

Do I avoid tax by leaving profit in my company?

Not permanently. Leaving profit in a company only defers tax. While the profit stays in the company, it is taxed once at 28%. As soon as it is paid out to you as a dividend, imputation credits cover the 28% already paid, and you pay further tax on the difference if your personal marginal rate is above 28%. The saving is real while the money is retained and working in the business, but it is a timing benefit, not a permanent exemption, unless you are eventually taxed at a lower personal rate than when the profit was earned.

What is a reasonable shareholder salary?

Inland Revenue expects a working shareholder in a closely held company to be paid a commercially realistic salary for the work they actually do, comparable to what an unrelated employee would be paid for the same role. Setting an artificially low salary purely to shift income into the lower 28% company rate can be challenged as tax avoidance. The 2011 Supreme Court decision in Penny and Hooper is the leading case on this point, and a separate attribution rule can also tax retained profit directly to the working person in some personal-services businesses.

What happens when I pay myself the retained company profit later?

When retained profit is distributed as a fully imputed dividend, you include the grossed-up dividend, the cash amount plus the imputation credit, in your taxable income. You then get credit for the 28% company tax already paid. If your marginal rate on that income is above 28%, you pay the difference. If it is at or below 28%, no further tax is owed, but any imputation credit above your liability is not refunded to an individual.

Do I get money back if my tax rate is below 28%?

No. Individuals cannot get a cash refund of imputation credits that exceed their tax liability for the year. If your marginal rate on the distributed profit is below 28%, for example 10.5% or 17.5%, the excess credit is simply not refunded, which means retaining profit in a company and later drawing it all out can leave you worse off than being taxed directly as a sole trader at your lower personal rate.

How much does a company cost to run compared to being a sole trader?

A company adds costs a sole trader does not have: a Companies Office annual return, annual financial statements, and typically a separate company income tax return, on top of your own personal return. Depending on how straightforward the business is, this commonly runs from around $800 to $3,000 or more a year in accounting fees, plus a small fixed Companies Office annual return fee. Enter your own expected figure in the calculator.

When does incorporating actually save tax?

A company tends to help most when your profit is well above what you need to live on, so a meaningful amount is retained and taxed at 28% instead of your higher marginal rate, when that retained money is genuinely reinvested in the business rather than drawn out straight away, and when you expect to be in a lower tax bracket in future years when you eventually draw the money out, such as in retirement. It tends to help least when you draw out most of the profit every year at a marginal rate close to or below 28%, since the compliance costs then outweigh any tax timing benefit.

GST for Tradies NZ 2026

When do tradies have to register for GST in NZ?

Registration is mandatory once your turnover exceeds $60,000 in any rolling 12-month period. Many tradies working full-time cross this threshold within a few months. You can also register voluntarily below the threshold, which is often worthwhile given how much GST is embedded in materials costs.

Do tradies charge GST on labour as well as materials?

Yes. If you are GST-registered, you charge 15% GST on your total invoice, covering both labour and materials. There is no separate GST treatment for the labour and materials components.

What needs to be on a tradie's tax invoice?

For invoices over $1,000 (including GST), the tax invoice must show: the words 'tax invoice', your name and GST number, the customer's name, the date, a description of the goods or services, the GST-exclusive amount, the GST amount, and the GST-inclusive total. For invoices $200 to $1,000 inclusive, a simplified tax invoice is allowed.

Can a tradie claim GST on a ute?

Yes, for the business-use portion. If the ute is used 80% for business and 20% private, you can claim 80% of the GST on the purchase price and on running costs like fuel and servicing. Keep a logbook to substantiate the business-use percentage.

Do subcontractors charge GST?

If the subcontractor is GST-registered, yes. They charge 15% GST on their invoice to the head contractor. The head contractor can claim this GST back as an input tax credit on their own GST return, so it is cashflow-neutral between registered parties.

What if my customer is a private homeowner?

You still charge 15% GST on the full invoice. Private homeowners cannot claim the GST back, so the GST is a real cost to them. Be clear in your quote whether the figure is GST-inclusive or GST-exclusive to avoid disputes.

GST on Imports NZ 2026

Is GST charged on all imports into New Zealand?

Yes. Since 1 December 2019, GST applies to all goods imported into New Zealand regardless of value. For goods over $1,000, NZ Customs collects GST at the border. For goods under $1,000, overseas sellers registered with Inland Revenue collect GST at the point of sale.

What is the formula for GST on imports over $1,000?

GST = (Customs value + freight + insurance + Customs duty) x 15%. The Customs value is the price paid for the goods, converted to NZD.

Do I pay GST on goods under $1,000 from overseas sellers?

Yes, but it is typically collected by the overseas seller at checkout if they are registered for NZ GST. Large platforms like Amazon, eBay, and AliExpress collect GST on low-value imported goods destined for NZ. If GST was not collected at the point of sale, Customs may collect it at the border.

Can I claim back GST paid on imports?

Yes, if you are GST-registered and the goods are for business use. Keep the Customs import entry and Inland Revenue-approved documentation. Claim the GST on your next GST return as an input tax credit.

Is there a de minimis threshold for import GST?

No. The $60 GST de minimis that existed before December 2019 was removed. All imported goods are subject to GST, although the collection point differs above and below $1,000.

Do I pay GST on imported services and digital products?

Yes. Since 1 October 2016, GST applies to remote services (digital downloads, SaaS subscriptions, streaming) supplied to NZ consumers by non-resident businesses. The overseas supplier charges 15% GST at checkout if they are registered.

GST Registration Threshold NZ 2026

What is the GST registration threshold in New Zealand?

The threshold is $60,000 of taxable turnover in any rolling 12-month period. Once your turnover exceeds this, registration is mandatory. The threshold is set under section 51 of the Goods and Services Tax Act 1985.

When does the GST registration threshold reset?

It does not reset. The $60,000 is a rolling 12-month test, not a financial year test. Once you exceed it, you must register even if your turnover drops in future. The only way to deregister is to formally apply to Inland Revenue and meet the criteria for deregistration.

How do I register for GST in NZ?

Register online through myIR, Inland Revenue's portal. You will need your IRD number and business details. Registration is usually processed within a few working days and you will be given a GST number and a filing frequency.

Should I register voluntarily below $60,000?

Voluntary registration often makes sense if you have significant business purchases that include GST (materials, tools, stock), or if most of your customers are GST-registered businesses. You claim back GST on expenses and charge GST on sales; between registered parties the GST is cashflow-neutral.

What counts toward the $60,000 threshold?

All taxable supplies you make in the course of a taxable activity: sales of goods, services, and zero-rated supplies (exports). Exempt supplies (residential rent, most financial services) do not count, and nor do one-off sales of capital assets or the private sale of personal items.

What happens if I do not register when I should have?

Inland Revenue can backdate your registration to the date you should have registered, and assess GST on all taxable supplies from that date as if you had charged it. You will owe the GST even though you did not collect it, plus possible penalties and interest.

NZ Contractor vs Employee Calculator 2026

Do contractors pay more ACC than employees in New Zealand?

Yes. Employees pay only the earners' levy (1.75%, capped at $156,641). Their employer separately pays an ACC work levy, but employees do not see this cost. Contractors pay both the earners' levy and the work levy themselves. Depending on your industry, the work levy for a contractor can add 0.4% to 3% or more to your effective ACC burden compared to what an employee sees.

Is KiwiSaver compulsory for contractors in New Zealand?

No. Voluntary KiwiSaver membership is available to all New Zealand residents, but there is no automatic enrolment for self-employed people and no employer contributions. Contractors can contribute voluntarily at any rate and still receive the government member tax credit (up to $260.72 per year). However, without an employer match, their KiwiSaver grows purely from their own contributions.

What is the GST threshold for NZ contractors?

If your annual turnover from your contracting work exceeds $60,000, you must register for GST and charge 15% on your invoices. Below this threshold, GST registration is voluntary. For B2B work, GST is largely neutral as the client can claim it back. The threshold is based on 12-month turnover, not income, and the clock can reset if you change business activity.

What expenses can a contractor deduct in New Zealand?

Contractors can deduct any expense that is incurred wholly or mainly for earning their income. Common deductible expenses include accountant and bookkeeper fees, professional indemnity and public liability insurance, work equipment and tools, a portion of home office costs (based on floor area or actual use), professional memberships and subscriptions, work-related training, and vehicle costs for work travel (not commuting). Personal expenses are not deductible. When in doubt, consult a registered tax agent.

How do contractors pay income tax in New Zealand?

Unlike employees who have PAYE deducted by their employer, contractors pay tax themselves either through provisional tax (three payments per year based on estimated income) or through the AIM (Accounting Income Method) which calculates provisional tax based on actual income each period. Contractors who receive schedular payments may have withholding tax (WT) deducted at source by the client. At year end, all income is declared in an individual tax return (IR3). Many contractors work with an accountant to manage their provisional tax obligations.

Contractor vs Employee Test NZ 2026

What is the contractor gateway test in New Zealand?

It is a statutory safe harbour that came into force on 21 February 2026. If an arrangement meets every one of its criteria, the worker is a contractor and cannot later claim to have been an employee. It does not replace the common law test; it sits in front of it. If any criterion is not met, the gateway simply does not apply and the common law test decides the question in the usual way.

Can a contractor work for other businesses?

Under the gateway the worker must be allowed to work for another person, but not at the same time as working for the party they have the arrangement with. This is narrower than a general freedom to take other work, and an agreement that forbids other work entirely will fail this criterion.

What happens if my arrangement fails the gateway test?

Nothing automatic. Failing the gateway does not make the worker an employee. It means the safe harbour is unavailable and the question is decided under the common law test, which looks at the real nature of the relationship rather than what the paperwork says. A worker can still be a contractor under the common law test.

Does the gateway test apply to arrangements signed before February 2026?

No. The gateway came into force on 21 February 2026 and is not retrospective, so arrangements entered into before that date are assessed under the common law test as they always were.

Does calling someone a contractor in the agreement make them one?

Not on its own. A written statement that the worker is a contractor is only the first of several criteria, and all of them must be met. Under the common law test, which applies whenever the gateway does not, the label in the paperwork has never been decisive; what matters is how the relationship actually works in practice.

FBT Attribution Calculator NZ 2026

What are the four FBT calculation options in NZ?

There are four FBT calculation options: (1) the single rate of 63.93% applied to all benefits, (2) the full alternate rate which calculates each attributed employee's FBT using the FBICR table on their net remuneration plus benefits, (3) the short-form alternate rate which applies 63.93% to attributed benefits and 49.25% to non-attributed benefits, and (4) the pooled alternate rate which applies 49.25% to employees within safe-harbour thresholds (cash income up to $160,000 and attributed benefits up to $13,400) and 63.93% to all others.

When should I use the FBT alternate rate over the single rate?

The alternate rate options usually save FBT when most employees earn under $180,000 in gross income because the single rate of 63.93% effectively taxes all benefits as if every employee earned over $180,000. If most employees fall in the lower personal income tax brackets, the full alternate rate calculation taxes their benefits at lower grossed-up rates (11.73%, 21.21%, 42.86%, or 49.25%) rather than the top 63.93% rate. The trade-off is more compliance work in quarter four.

What is the FBICR table for the 2026 FBT year?

The FBT Income Tax Cash equivalent Rate (FBICR) table for the 2026 tax year applies these rates to net remuneration: 11.73% on the first $13,962, 21.21% from $13,963 to $45,230, 42.86% from $45,231 to $62,450, 49.25% from $62,451 to $130,724, and 63.93% above $130,724. These rates are the gross-up of the personal income tax rates (10.5%, 17.5%, 30%, 33%, and 39%) and are published on page 35 of IRD's Fringe Benefit Tax Guide IR409.

What are the safe-harbour thresholds for the pooled alternate rate?

Under the pooled alternate rate option, employees qualify for the 49.25% rate if their cash income is $160,000 or less AND their attributed benefits are $13,400 or less. Employees who exceed either threshold can still qualify if their all-inclusive pay (net cash income plus attributed benefits) is under $130,724 for the 2026 year. All other employees must have their benefits taxed at 63.93%.

Can I switch FBT calculation methods between quarters?

You can use the single rate of 63.93% in any of the first three quarters, or the alternate rate of 49.25%. In quarter four you must perform a wash-up calculation if you used 49.25% in any earlier quarter, choosing the full alternate rate, short-form alternate rate, or pooled alternate rate option. If you used the single rate in all four quarters, you can apply within two months of your Q4 assessment to switch to an alternate rate calculation.

NZ FBT Calculator 2026

What is the NZ FBT single rate for 2026/27?

The NZ FBT single rate is 63.93%. This rate applies to all fringe benefits regardless of the employee's income. It was increased from 49.25% to 63.93% on 1 April 2021 when the top personal income tax rate of 39% was introduced for income over $180,000.

What is the NZ FBT alternate rate for 2026/27?

The alternate FBT rate is 49.25%. It can be used in quarters 1 to 3 for employees whose total income plus fringe benefits is less than $180,000 for the tax year. A wash-up calculation is required in quarter 4 using the full alternate, short-form alternate, or pooled alternate rate option.

What is the current IRD prescribed interest rate for FBT?

The IRD prescribed interest rate for FBT on low-interest employment loans is 5.77% from 1 January 2026 (down from 6.29% in the previous quarter). The rate is reviewed quarterly by Inland Revenue.

How is FBT on motor vehicles calculated?

Motor vehicle FBT taxable value can be calculated as either 5% of the GST-inclusive cost price per quarter (20% annually), or 9% of the GST-inclusive tax book value per quarter (36% annually, with a $8,333 minimum). Per Section RD 29(5)(a) of the Income Tax Act 2007, the formula is (Rate x Value x Days available) / 90, where days available is capped at 90 even if the quarter has 91 or 92 actual days. The taxable value is reduced for days the vehicle is unavailable for at least 24 hours, days used for emergency calls, days the employee is away on business for over 24 hours, and any employee contribution paid.

When does FBT have to be filed and paid?

Quarterly FBT returns are due within 20 days of the end of each quarter (June, September, December). The fourth quarter return covering 1 January to 31 March is due 31 May. Employers with PAYE under $1 million per year may file annually instead.

Charity FBT Calculator NZ

Are NZ charities exempt from FBT?

Generally yes. Charities registered with Charities Services are exempt from FBT on benefits provided to employees while they are carrying out the organisation's charitable, benevolent, cultural, or philanthropic activities. The exemption is in section CX 25 of the Income Tax Act 2007. The main exception is short-term charge facilities (such as petrol vouchers and store gift cards) above the lesser of $1,200 or 5% of the employee's salary, and benefits provided to employees of any non-charitable business operated by the charity.

What is a short-term charge facility for charity FBT?

A short-term charge facility is an arrangement that allows a charity employee to obtain goods or services that have no connection with the charity's operations, where the charity is responsible for the payment. Examples include business credit cards used for private purchases, petrol station vouchers, supermarket gift cards, and pre-loaded store cards. Employment-related loans are specifically excluded from the short-term charge facility definition. FBT applies on these benefits if they exceed the threshold.

How is the charity FBT threshold calculated?

FBT applies to a charity employee if the cumulative value of short-term charge facilities provided to that employee in a tax year exceeds the lesser of $1,200 OR 5% of their gross salary or wages for the tax year. For an employee earning $50,000, 5% is $2,500, so the threshold is the lesser amount of $1,200. For an employee earning $20,000, 5% is $1,000, so the threshold is $1,000. The threshold applies to the cumulative annual value, not per-quarter.

Does FBT apply to a charity-run business?

Yes. Charities that operate a business outside their charitable purpose (such as a charity that runs a commercial trading arm) must register and pay FBT on benefits provided to employees of that business. The general charity exemption only covers benefits provided to employees while they are carrying out the charity's charitable activities. A charity provided car used by a fundraising volunteer is exempt; the same car used by an employee of the charity's commercial business is taxable.

What happens if a charity is deregistered?

If a charity is deregistered or voluntarily wound up and removed from the Charities Services register, the FBT exemption no longer applies from the date of removal. If the charity does not comply with its constitution, the exemption ends from the date of non-compliance. FBT becomes payable from the first day of the quarter or income year after deregistration. The exemption is not back-dated if the charity met its rules until removal.

Close Company Vehicle FBT vs Income Tax Calculator NZ

Can a close company opt out of paying FBT on a motor vehicle?

Yes. From the 2017-18 income year, a close company can elect under section CX 17 of the Income Tax Act 2007 to opt out of the FBT rules for motor vehicles provided to shareholder-employees. The election applies if the company provides only one or two vehicles for shareholder-employee private use and provides no other fringe benefits. Once elected, the company applies the motor vehicle expenditure rules in subpart DE instead, which require apportioning vehicle costs between business and private use using either actual costs with a logbook or the Commissioner's kilometre rates.

When is FBT cheaper than opting out for a close company vehicle?

FBT generally costs less than opting out when business use is low (under 30 percent), running costs are high relative to the vehicle's cost price, and the vehicle is older with a low tax book value. The opt-out method generally costs less when business use is high (over 50 percent), running costs are modest, and the vehicle is newer or expensive. The break-even point depends on the vehicle cost, running costs, depreciation, and the business use percentage.

What are the IRD kilometre rates for the 2025-26 income year?

The IRD has set Tier 1 rates of $1.20 per km for petrol, $1.30 for diesel, 90 cents for petrol hybrid, and $1.22 for electric vehicles for the 2025-26 income year. These rates apply to the business portion of the first 14,000 kilometres travelled. Tier 2 rates (running costs only, applying after 14,000 km) are 37 cents petrol, 38 cents diesel, 24 cents petrol hybrid, and 23 cents electric. The rates are GST inclusive and include depreciation, so no separate depreciation deduction can be claimed.

How do I make a section CX 17 election to opt out of FBT?

Make the election by writing a note that states the company is opting out of the FBT rules for motor vehicles. Include the note with the income tax return for the year the vehicle is acquired or first used for business. The election applies to that motor vehicle arrangement until the company stops using the vehicle for business or disposes of the vehicle. The election cannot be reversed during the vehicle's life, and the company must apportion expenses for that vehicle for the entire period.

Can I switch between the cost price and tax book value FBT methods?

No. Once you choose either the cost price method (5 percent per quarter / 20 percent per annum on GST-inclusive cost price) or the tax book value method (9 percent per quarter / 36 percent per annum on GST-inclusive tax book value, with an $8,333 minimum), you must continue using that method for at least five years. The tax book value method becomes increasingly attractive as the vehicle depreciates, but the lock-in means you should model the full ownership period before electing.

FBT De Minimis Calculator NZ

What is the FBT de minimis exemption in NZ?

The de minimis exemption removes unclassified fringe benefits from FBT if both thresholds are met: the total taxable value of unclassified benefits per employee per quarter is $300 or less (or $1,200 per year for annual or income year filers), AND the total unclassified benefits provided by the employer to all employees in the last four quarters (including the current quarter) is $22,500 or less. Unclassified benefits include gifts, vouchers, hampers, prizes, and other employment-related perks not specifically classified under FBT legislation.

What happens if my Christmas gift exceeds $300 per employee?

If a single employee receives unclassified benefits above $300 in a quarter, the full value of all unclassified benefits to that employee is subject to FBT, not just the amount over $300. This is the all-or-nothing rule. For example, a $350 voucher means FBT applies to the entire $350, not just the $50 excess. The $22,500 employer threshold operates the same way: once breached for the rolling four quarters, FBT applies to the full taxable value of all unclassified benefits provided to all employees that quarter.

Are gift cards subject to FBT in New Zealand?

Yes. Both open-loop gift cards (such as Prezzy Cards) and closed-loop gift cards (such as a Farmers voucher) are unclassified fringe benefits subject to FBT. They count towards the $300 per employee per quarter and $22,500 per employer per annum de minimis thresholds. If the gift card represents food and drink, it is also relevant to entertainment expense rules for income tax deductibility.

Do associated employers have to combine their benefits for the $22,500 threshold?

Yes. When applying the $22,500 employer threshold, benefits provided by associated entities (such as related companies in a group) must be combined. If two associated companies together exceed $22,500 in a rolling four-quarter period, both companies lose the de minimis exemption even if either company is under the threshold individually.

What public transport benefits are exempt from FBT?

From 1 April 2023 employer-funded fares for bus, train, ferry, and cable car travel are exempt from FBT if provided mainly for the employee to travel between work and home. Employer-provided bicycles, electric bicycles, scooters, electric scooters, and other low-powered vehicles classified by Waka Kotahi as mobility devices are also exempt, as are vehicle-share services for these modes. The exemption does not cover taxis, shuttles, or air transport.

FBT Entertainment Calculator NZ

Are Christmas parties tax deductible in NZ?

Christmas parties for employees are 50% deductible for income tax in New Zealand, whether held on or off business premises. The 50% limitation applies because there is a significant private element to the function. FBT does not normally apply because the employees enjoy the benefit during the function rather than choosing when to take it. Supporting expenses such as catering staff, glassware hire, and venue hire are also 50% deductible.

Are client lunches 100% deductible in NZ?

No. Meals and drinks shared with clients, suppliers, or business contacts are 50% deductible for income tax in New Zealand because the expense has a significant private element. The 50% limit applies regardless of the meeting's business purpose. The exception is meals an employee buys while travelling alone on business, which are 100% deductible.

When does entertainment trigger FBT in NZ?

Entertainment triggers FBT when the employee can choose when to enjoy the benefit (such as a restaurant gift voucher) or when the entertainment is enjoyed outside New Zealand. Common FBT-triggering items include restaurant vouchers given to employees as rewards, gym memberships, golf or social club subscriptions, weekend getaways for employees, gift cards over the de minimis threshold, and overseas trips provided as employee rewards. When entertainment is FBT-liable, it becomes 100% income tax deductible (and the FBT itself is also deductible).

Are food and drink at conferences 100% deductible?

Food and drink provided at a conference, education course, or similar event lasting at least four hours is 100% deductible if the event is mainly for business purposes. If the conference is mainly for entertainment (a social retreat with token training sessions), only 50% is deductible. The four-hour threshold is the IRD's published test.

Are gym memberships for staff tax deductible in NZ?

Employer-provided gym memberships are 100% income tax deductible but trigger FBT because the employee can choose when to use the benefit. The employer pays FBT on the GST-inclusive cost of the membership, which counts as an unclassified fringe benefit and goes towards the $300 per employee per quarter and $22,500 per employer per annum de minimis thresholds. The same treatment applies to golf club, social club, and similar subscriptions.

FBT Filing Frequency Calculator NZ

Can I file FBT annually instead of quarterly in NZ?

Yes, if you meet the eligibility rules. You can file an annual FBT return (IR422) covering 1 April to 31 March if you provide benefits to ordinary employees (not shareholder-employees), AND your gross PAYE plus ESCT for the previous year was $1,000,000 or less, OR you were not an employer in the previous tax year. The annual return is due 31 May. You must elect annual filing by the last day of the first FBT quarter you want it to apply to (typically by 30 June).

What is the income year FBT return (IR421)?

The income year FBT return (IR421) is for close companies that provide fringe benefits only to shareholder-employees. It covers the same period as the company's income tax year and is due on the same date as the company income tax return. To qualify: the company must be a close company, gross PAYE plus ESCT must be $1,000,000 or less in the previous year, OR the company must provide no more than two motor vehicles to shareholder-employees AND no other fringe benefits. The IR421 simplifies compliance for owner-operated companies by aligning FBT with annual income tax filing.

What are the FBT cash flow implications of each option?

Quarterly filing (IR420) requires four payments per year (20 July, 20 October, 20 January, 31 May), spreading the cash outflow but creating the highest compliance burden. Annual filing (IR422) requires one payment by 31 May, helping cash flow during the year but creating a single large bill. Income year filing (IR421) aligns with your income tax due date and simplifies compliance further but defers the cash outflow even longer. Annual and income year filing also delay any FBT refunds (e.g. from Q4 wash-up) by up to 12 months.

How do I switch from quarterly to annual FBT filing?

Send a message in myIR or write to IRD electing annual filing, including the FBT year you want it to apply from. The election must be made by the last day of the first FBT quarter the change applies to (so by 30 June 2026 for the 2027 FBT year starting 1 April 2026). You cannot switch mid-year. Once elected, you continue filing annually as long as you remain eligible. If you exceed the $1m PAYE+ESCT threshold, you must switch back to quarterly from the next FBT year.

When are FBT returns due in NZ?

Quarterly IR420 returns are due 20 July (Q1), 20 October (Q2), 20 January (Q3), and 31 May (Q4 wash-up). The annual IR422 return is due 31 May. The income year IR421 return is due on the same date as the company's annual income tax return, which depends on the balance date. Late filing penalties and use-of-money interest apply if returns or payments are late.

GST on FBT Calculator NZ

How is GST calculated on fringe benefits in NZ?

GST on fringe benefits is calculated using the formula: taxable value × 3 ÷ 23 = GST to pay. This is because fringe benefit taxable values are GST-inclusive, and the GST component of a 15% GST-inclusive amount is 3/23 of the total. The GST adjustment is entered separately on the IR420 return (box 7 for quarterly returns or box 6 for annual/income year returns) and is paid in addition to the FBT itself.

Which fringe benefits are exempt from GST?

Fringe benefits are GST-exempt if the underlying supply is exempt from GST (such as financial services or residential rental accommodation) or zero-rated (such as exports). Common examples include employer contributions to superannuation funds, low-interest employment loans (financial services exemption), and employer-paid life insurance (typically GST-exempt). For these benefits, the taxable value is excluded from the 3/23 GST calculation.

Can I claim GST back on FBT in my GST return?

No. The GST paid on fringe benefits through the FBT return cannot be claimed as input tax in your separate GST return. It is a one-way adjustment that effectively reverses the GST input credit you may have claimed when originally purchasing the benefit. However, the GST on FBT amount IS deductible for income tax purposes as part of the overall FBT cost.

Do I include the FBT GST adjustment in my regular GST return?

No. GST calculated on fringe benefits is paid through the IR420 FBT return only, not the GST 101 or GST 103 return. Including it in your GST return would result in double-counting. However, employee contributions toward fringe benefits ARE included in your regular GST return as a separate supply, with GST output of 3/23 of the contribution amount included in box 5 of the GST return.

What if my business is not GST-registered?

If you are not registered for GST, you do not include any GST adjustment on your FBT return. Enter zero in the GST box and pay only the FBT itself. If you became GST-registered or de-registered partway through the FBT return period, GST applies only to the fringe benefits provided during the time you were registered. Use the change GST amount toggle in myIR to enter your apportioned amount.

FBT Cost vs Tax Book Value Calculator NZ

What is the difference between cost price and tax book value for FBT?

Under the cost price method, FBT taxable value is 5% per quarter (20% per annum) of the GST-inclusive original cost price of the vehicle. The taxable value stays the same every year regardless of depreciation. Under the tax book value method, FBT taxable value is 9% per quarter (36% per annum) of the GST-inclusive depreciated tax book value at the start of the tax year. The TBV taxable value drops as the vehicle depreciates, but once the tax book value falls below $8,333, the method must use $8,333 as a minimum floor.

Can I switch between cost price and tax book value FBT methods?

No. Once you choose a valuation method for a vehicle, you must continue using it for at least 5 years. The 5-year minimum applies even if you realise the other method would have been cheaper. After 5 years you can switch (subject to certain conditions in section RD 28 of the Income Tax Act 2007), but most employers continue with the original method to avoid recalculating.

When does the tax book value method save FBT compared to cost price?

The tax book value method generally saves FBT for older vehicles where significant depreciation has occurred. In year one the cost method is almost always cheaper because 36% of cost is much higher than 20%. As the vehicle depreciates at 30% diminishing value (the IRD rate for passenger vehicles), the tax book value method becomes progressively cheaper. The crossover for a typical petrol car is around year 4 to 5, which makes the 5-year lock-in particularly important to model carefully.

What is the $8,333 minimum tax book value for FBT?

Once the tax book value of a vehicle falls below $8,333 (one third of the average passenger vehicle cost), FBT must still be calculated as if the tax book value was $8,333. This floor prevents fully depreciated vehicles from escaping FBT entirely. The floor effectively caps the FBT saving from the tax book value method at older ages: a $40,000 vehicle that has depreciated to $5,000 still pays FBT on $8,333 (giving $3,000 annual taxable value, $1,918 in FBT at the single rate).

Does the FBT calculation change when the vehicle is sold or replaced?

Yes. The 5-year lock-in applies to a specific vehicle. When you sell or replace the vehicle, the new vehicle is a fresh choice between cost and tax book value methods. This means employers can effectively re-optimise every time they replace a fleet vehicle, which is why the cost method (which front-loads the FBT but is simpler) is often preferred for vehicles held for less than 5 years.

Public Transport FBT Exemption Checker NZ

Are employer-paid bus passes FBT-exempt in NZ?

Yes, since 1 April 2023, employer-funded bus fares are FBT-exempt if they are provided mainly for the employee to travel between work and home. The exemption also covers train, ferry, and cable car fares for the same purpose. The benefit must be primarily for home-to-work travel; if the employer pays for general personal travel, the exemption does not apply and the cost is an unclassified fringe benefit subject to the de minimis exemption.

Are employer-provided e-bikes FBT-exempt?

Yes. Employer-provided bicycles, electric bicycles, scooters, electric scooters, and other low-powered vehicles classified by Waka Kotahi as mobility devices are FBT-exempt from 1 April 2023. The exemption also covers vehicle-share services for any of these transport modes (such as Lime, Beam, or Onzo subscriptions). The exemption applies regardless of whether the e-bike is used for home-to-work travel or general personal use, distinguishing it from the public transport exemption which has a home-to-work test.

Does the public transport FBT exemption cover taxis?

No. Taxis, shuttles, ride-share services (Uber, Ola), and air transport are NOT covered by the public transport FBT exemption. These remain subject to the general FBT rules. The exemption is limited to bus, train, ferry, and cable car fares plus the Total Mobility Scheme equivalents. Taxi rides for employees would be unclassified fringe benefits subject to the $300 per employee per quarter and $22,500 per employer per annum de minimis thresholds.

What if the employee uses the bus pass for personal travel too?

The exemption applies if the bus pass is provided mainly for home-to-work travel. Some incidental personal use does not break the exemption. However, if the dominant purpose is personal travel (such as a generic monthly pass given as a perk regardless of work commute), the exemption does not apply and the full value becomes an unclassified fringe benefit. The IRD's Tax Information Bulletin Vol 35 No 6 provides examples of acceptable use patterns.

Are car parks at work FBT-exempt?

Employer-provided car parks AT the employer's business premises are not subject to FBT (they are an on-premises benefit). Car parks NEAR the workplace but not on the premises (such as a leased space in a commercial car park) are technically a fringe benefit but in practice are usually treated as on-premises if the employer has an exclusive right to use them. Car parks for client visits are not benefits to the employee at all.

FBT Quarterly Return Estimator NZ

When are FBT quarterly returns due in NZ?

FBT quarterly returns (IR420) are due within 20 days of the end of each quarter. Q1 (1 April to 30 June) is due 20 July, Q2 (1 July to 30 September) is due 20 October, and Q3 (1 October to 31 December) is due 20 January. The Q4 return (1 January to 31 March), which includes the annual wash-up if the alternate rate option was used, is due 31 May. Employers with PAYE under $1 million per year may file annually instead.

What benefits go on an FBT quarterly return?

The IR420 quarterly FBT return aggregates motor vehicle FBT (Box A), goods and services FBT (Box B), subsidised transport FBT (Box C), low-interest loan FBT (Box D), and insurance and superannuation contribution FBT (Box E). The total taxable value goes to Box 3, with the FBT calculation applied at either the single rate of 63.93% or the alternate rate of 49.25% for quarters 1-3. GST adjustments are then applied separately.

Can I use different FBT rates in different quarters?

Yes for quarters 1 to 3. You can choose the single rate (63.93%) or alternate rate (49.25%) independently for each of the first three quarters. However, if you used the alternate rate in any quarter, you must perform a quarter 4 wash-up using the full alternate, short-form alternate, or pooled alternate rate option. Once an alternate rate option is chosen for the quarter 4 wash-up, you cannot reverse the election.

Do I need to file a nil FBT return?

Yes. Once registered for FBT, you must file a return for every quarter (or every year if on annual filing) even if no fringe benefits were provided. File a nil return through myIR or send a paper IR420 marked nil. To stop filing nil returns, you can de-register for FBT through myIR if you are confident you will not provide fringe benefits in future.

How does the GST adjustment work on the FBT return?

GST is added to FBT taxable values for benefits that have GST in their cost (such as goods, services, vehicles, and insurance). The GST portion of the FBT itself cannot be claimed in your GST return. Instead, the GST on FBT is included in the FBT amount and is deductible to the company as part of the FBT income tax deduction. The IR420 calculates the GST amount automatically based on the benefit types entered.

Shareholder Loan FBT Calculator NZ

Does FBT apply to overdrawn shareholder current accounts in NZ?

Yes. A debit balance in a shareholder-employee's current account is treated as a loan from the company. If the company does not charge interest at or above the IRD prescribed rate (currently 5.77% from 1 January 2026), the difference is a low-interest loan fringe benefit subject to FBT. The taxable value is the prescribed rate minus the actual rate charged, applied to the balance for the period.

Should I charge shareholder interest or pay FBT on an overdrawn account?

Charging interest at the IRD prescribed rate is almost always cheaper than paying FBT. At the 63.93% single rate, the after-tax FBT cost is roughly 46 percent of the deemed interest amount, while charging interest only costs the family the 28 percent company tax on the interest income. The exception is when the shareholder genuinely cannot fund the interest payment, in which case FBT may be the only option.

What is the current FBT prescribed interest rate in NZ?

The IRD prescribed interest rate for FBT on low-interest employment loans is 5.77 percent per annum from 1 January 2026, down from 6.29 percent in the previous quarter. The rate is reviewed quarterly by Inland Revenue and tracks market rates with a lag. Recent rates: 5.77% (from 1 January 2026), 6.29% (Q4 2025), 6.67% (Q3 2025), 7.38% (Q2 2025), 8.41% (October 2023 to March 2025).

Are salary advances exempt from FBT?

Yes. Salary advances of up to $2,000 are exempt from FBT. The exemption applies once per employee per year. Larger advances or recurring small advances may not qualify and should be treated as low-interest loans subject to the prescribed rate test.

Does interest charged to a shareholder need to be paid in cash?

The interest must be either paid in cash or credited to the shareholder's current account (compounding the debit). It cannot simply be journalled as a notional charge with no economic effect. Once credited, it becomes income to the company and must be included in the company's income tax return for the year. The shareholder's deduction (if any) for the interest depends on whether the borrowed funds were used for an income-producing purpose.

Subsidised Transport FBT Calculator NZ

What is the subsidised transport FBT rule in NZ?

If a business in the transport industry (airlines, buses, ferries, rail) provides discounted travel to employees, FBT applies if the employee pays less than 25 percent of the highest public fare for the same trip. The taxable value is 25 percent of the highest public fare minus the amount the employee actually paid. This rule is in section CX 8 of the Income Tax Act 2007 and applies only to businesses whose primary activity is providing public transport.

Does the subsidised transport rule apply to all NZ businesses?

No. The subsidised transport rule only applies to businesses whose business is supplying transport to the public, such as Air New Zealand, InterCity, KiwiRail, ferry operators, and similar. For other businesses providing public transport benefits to employees (such as a non-transport company subsidising bus passes for staff), the unclassified benefit rules apply, and the 1 April 2023 public transport exemption may make the benefit FBT-exempt entirely.

How does the highest public fare rule work?

The highest public fare is the most expensive fare a member of the public could be charged for the same class of travel between the same points at the time the employee travels. For example, an unrestricted business class ticket purchased at short notice might be the highest fare for an Auckland to Wellington route. The 25 percent threshold is calculated against this highest fare, not against an average or discounted fare.

Are subsidised flights for airline staff subject to FBT?

Yes, if the staff fare is less than 25 percent of the highest public fare for that route. For example, if the highest public business class fare from Auckland to Wellington is $800 and an Air New Zealand employee pays $50 for the same flight, FBT applies on the difference: 25 percent of $800 = $200, minus $50 paid = $150 taxable value. If the employee pays $200 or more, no FBT applies because they have met the 25 percent threshold.

Can subsidised transport benefits be pooled?

Yes. Subsidised transport benefits with an annual taxable value above $1,000 per employee can still be pooled for FBT purposes if all employees have the same or similar entitlement. Below $1,000 per employee per year, the benefits are below the attribution threshold and are pooled by default. Pooled benefits are taxed at 49.25% (or 63.93% for major shareholder-employees).

Work-Related Vehicle FBT Exemption Checker NZ

Is a double cab ute exempt from FBT in NZ?

Not automatically. Inland Revenue has confirmed that a double cab ute can qualify for the Work-Related Vehicle (WRV) FBT exemption, but only if all four conditions are met: the vehicle must be designed equally for carrying people and goods (not exclusively for people), it must have permanent and prominent business identification on the exterior, the employer must issue a written letter of restriction prohibiting private use beyond home-to-work travel, and the employer must conduct quarterly compliance checks. The widespread belief that all utes are automatically FBT-exempt is incorrect and one of the most common FBT errors.

What are the four requirements for the WRV FBT exemption?

The four requirements are: (1) the vehicle must not be designed exclusively or mainly to carry people (excludes most cars; double cab utes qualify because they are dual purpose); (2) it must have permanent and prominently displayed business identification on the exterior (magnetic signs do not count); (3) the employer must provide a written letter of restriction stating the vehicle is not available for private use except home-to-work travel and incidental business travel; (4) the employer must conduct quarterly checks to ensure the restriction is being followed (logbooks, petrol receipts, GPS data).

Does a magnetic company sign count for the WRV exemption?

No. The business identification must be permanent and prominently displayed. Magnetic signs, removable decals, or signs that can be taken off when the vehicle is used privately do not satisfy the WRV exemption requirements. The signage must be permanently affixed (vinyl wraps, painted-on logos, or permanent decals) and must be on the vehicle exterior at all times.

What counts as private use for the WRV exemption?

The WRV exemption allows two types of travel: home-to-work commuting and travel that is incidental to business use (such as stopping at the supermarket on the way home from a job site). Anything else - school runs, weekend errands, taking the family out, vacation use, holiday trips - breaks the exemption for those days. The exemption applies on a daily basis, so you can pay FBT on Saturdays and Sundays only if the vehicle is allowed for private use on weekends, while keeping the exemption for weekdays.

What if the vehicle weighs more than 3,500 kg?

Vehicles with a gross laden weight (GLW) over 3,500 kg are NOT covered by the standard motor vehicle FBT rules at all. They fall outside the FBT motor vehicle definition and are treated as unclassified benefits if provided for private use. This means a private-use heavy truck would be valued differently for FBT (typically based on the actual cost of the private use rather than availability), and may be subject to the de minimis exemption.

First Year Self-Employed Tax Bill Calculator NZ 2026

Why is the second year of self-employment more expensive than the first?

Because two tax years collide. In your first year nothing is withheld, so the whole bill falls due as terminal tax after you file. If that bill is large enough, you also enter the provisional tax regime for the second year, which means paying toward the second year's tax in instalments while the first year's bill is still being settled. Neither amount is wrong or unexpected on its own; the difficulty is that they arrive close together, and a first year budget that covered only the first year's tax will not cover both.

What is residual income tax?

It is your income tax for the year after deducting any tax credits, but before deducting tax already paid such as PAYE or provisional instalments. It matters because it is the figure Inland Revenue tests to decide whether you must pay provisional tax the following year. If your residual income tax for a year exceeds the threshold, you are a provisional taxpayer for the next one. The threshold is a fixed dollar amount that is set by legislation and should be checked against Inland Revenue's current guidance.

How is provisional tax calculated in the first year I have to pay it?

The standard method uses an uplift: your previous year's residual income tax plus 5 percent, paid in three instalments across the year. It is deliberately based on the year you have already finished, because that figure is known, and it means a growing business underpays and a shrinking one overpays. You can instead use the estimation method and pay based on what you expect to earn, but underestimating exposes you to use of money interest, so most people in a first provisional year stay with the uplift.

Can I avoid the double hit?

You cannot avoid owing the money, but you can avoid being surprised by it. The two practical options are to set aside a share of every payment from your first day of trading, which is what this calculator sizes, or to use a tax pooling provider to spread the timing at a cost. Voluntary early payments toward provisional tax are also possible. What does not work is treating your first year's low tax as the normal state of affairs, because it is the only year that will ever look like that.

Does this include GST?

No. GST is a separate obligation with its own filing frequency and due dates, and it is not income tax. If your turnover has passed the registration threshold you will be handling GST returns alongside everything here, and the money collected as GST was never yours to spend. Treat it as a third stream to reserve, not as part of the figures on this page.

GST Due Dates 2026/27 NZ

When is my GST return due in New Zealand?

GST returns and payments are generally due by the 28th of the month following the end of the GST period. The exceptions are the period ending 30 November (due 15 January) and the period ending 31 March (due 7 May).

What are the GST filing frequencies in NZ?

There are three filing frequencies: monthly (mandatory for turnover over $24 million, optional for others), two-monthly (the default for most small and medium businesses), and six-monthly (available for businesses with turnover under $500,000).

Can I change my GST filing frequency?

Yes. You can apply to Inland Revenue to change your frequency at any time, though the change usually takes effect from the start of the next taxable period. You must remain eligible for your chosen frequency based on turnover.

What happens if I file or pay my GST late?

Inland Revenue charges late filing penalties ($250 flat fee in most cases) and late payment penalties (1% of unpaid GST after one day, another 4% after seven days, then monthly interest). Consistent late filing can also lead to IRD reviewing your GST registration and filing frequency.

Can I file my GST return through myIR?

Yes. Most NZ businesses file GST returns through IRD's myIR portal, which calculates your net GST payable or refundable automatically once you enter your sales, zero-rated supplies, and input tax credits.

NZ Rental Chattels Depreciation Calculator 2026

Can I still depreciate my rental building?

No. Building depreciation is 0% for all buildings (residential and commercial) from the 2024/25 income year onwards. Previously, commercial buildings had a 2% depreciation rate restored between 2020 and 2024 as a Covid recovery measure, but that was removed in Budget 2024. Residential buildings have had 0% since 2011. You CAN still depreciate items that are not part of the building itself - chattels like carpet, curtains, appliances, heat pumps, hot water cylinders, and furniture.

What's the difference between diminishing value and straight-line?

Diminishing value (DV) applies the rate to the current book value each year, so depreciation is highest in year 1 and decreases over time. Straight-line (SL) applies a lower rate to the original cost, producing equal deductions each year. DV fronts the tax benefit (better if your marginal rate is high now); SL spreads it evenly. You choose the method when you first depreciate an asset and cannot switch for that asset. DV rates are typically about 1.5x the SL rate for the same asset life.

What is the low-value asset threshold?

Assets costing $1,000 or less (GST-exclusive) can be written off immediately in the year of purchase rather than depreciated over time. This threshold was temporarily raised to $5,000 during 2020-2021 as a Covid measure but reverted to $1,000 from 17 March 2021 onwards. The threshold applies per asset, so you can immediately expense multiple individual items as long as each is $1,000 or less. This is useful for smaller chattels like smoke alarms, individual kitchen appliances, or furniture pieces.

What counts as a chattel vs part of the building?

IRD distinguishes between items that are permanently part of the building (walls, roof, plumbing, electrical wiring - building and not depreciable) and items that are separable chattels (carpet laid over floors, freestanding appliances, removable heat pumps, furniture - depreciable). Hot water cylinders are chattels even though plumbed in. Heat pumps are chattels. Carpet is chattel even though fixed to the floor. If in doubt, ask: could this be removed and replaced without structural work? If yes, it's likely a chattel.

Do I have to depreciate chattels or can I skip it?

Technically, depreciation is mandatory - you're deemed to have claimed it whether you actually did or not. If you don't claim it now, you lose the deduction, but on sale you still have to recapture (add back as income) any depreciation recovered on chattels sold for more than book value. Most rental investors claim chattels depreciation because it creates legitimate current-year deductions - typically $2,000-$5,000 per year for a standard rental property.

NZ Provisional Tax Calculator 2026

How do I know if I need to pay provisional tax?

Check your most recent income tax assessment from IRD. If the residual income tax (the amount you owed after all credits) was more than $5,000, you are required to pay provisional tax in the following year. If your RIT was $5,000 or less, you are in the safe harbour and only need to pay terminal tax after the year ends.

What happens if I miss a provisional tax instalment?

Missing a provisional tax instalment triggers use-of-money interest on the unpaid amount from the due date. If you are using the standard uplift method, you lose the UOMI protection for that instalment. IRD may also apply late payment penalties. Pay as soon as possible if you miss a due date to limit the interest accumulation.

Can I reduce my provisional tax if my income drops?

Yes. If you use the estimation method, you can base your provisional tax on a lower income estimate. If you are partway through the year using standard uplift and your income has dropped significantly, you can switch to the estimation method and pay lower amounts for the remaining instalments. Keep records of your income to support the estimate in case IRD enquires.

Is provisional tax different from GST?

Yes. Provisional tax is an income tax prepayment on your net income (revenue minus expenses). GST is a consumption tax on revenue and has nothing to do with provisional tax, except that under the AIM method, provisional tax payments are aligned with GST return dates for administrative convenience.

What is a residual income tax assessment and where do I find mine?

Your residual income tax is shown on your income tax assessment (called a tax assessment notice) from IRD. You can find it in your myIR account at ird.govt.nz. Look for the field labelled RIT or residual income tax. This is the figure you need for the standard uplift calculation.

Reverse GST Calculator NZ 2026

What is the reverse GST formula in New Zealand?

The IRD-prescribed formula is: GST content = GST-inclusive total x 3 / 23. The GST-exclusive amount is the total minus the GST content. Dividing the total by 1.15 gives the same GST-exclusive result.

Why is dividing by 1.15 not the same as subtracting 15%?

Adding 15% to a price and then subtracting 15% from the new total does not get you back to the original. Example: $100 plus 15% is $115. $115 minus 15% is $97.75, not $100. The correct way to reverse GST is to divide by 1.15, or use the 3/23 fraction.

Why does IRD use the 3/23 fraction?

15 divided by 115 equals 3/23 exactly, so the fraction avoids the recurring decimal 0.13043478... that results from dividing 15 by 115. Using 3/23 eliminates cumulative rounding error when extracting GST from many invoices in sequence, which matters for GST return accuracy.

How do I remove GST from $1,150?

$1,150 x 3 / 23 = $150 GST content. The GST-exclusive amount is $1,150 - $150 = $1,000.

Can I use this calculator for the old 12.5% GST rate?

Yes. For transactions before 1 October 2010 at 12.5% GST, the fraction is 1/9. Multiply the GST-inclusive total by 1 and divide by 9 to get the GST content. Our main GST calculator also supports custom rates.

Salary Plus Self-Employed Tax Calculator NZ 2026

Why is my side hustle taxed more than I expected in New Zealand?

Because it is stacked on top of your salary rather than taxed from the bottom of the scale. Your salary has already used up the low brackets, so the first dollar of self-employed profit is taxed at whatever rate your salary reached, and it can push you into the next bracket as it grows. On the default figures a $70,000 salary has already consumed the 10.5 and 17.5 percent bands, so $25,000 of side profit is taxed partly at 30 percent and partly at 33 percent. That produces an effective rate on the side income far above the 17.5 percent many people assume applies.

Does PAYE on my salary cover my self-employed income?

No. Your employer deducts PAYE as though your salary is your only income, because that is all they know about. Nothing is withheld against your self-employed profit, so the whole of the additional tax falls due when you file. This is why people with a salary and a side business are so often surprised by their first bill: nothing was ever wrong with the PAYE, it simply was not calculating the same thing.

Do I pay ACC levies on side income as well as on my salary?

Yes. The ACC earner levy already comes out of your salary through PAYE, and it also applies to your self-employed profit. The levy is charged on your combined liable earnings up to an annual maximum, so if your salary alone already exceeds that maximum, no further earner levy is due on the side income. Self-employed work may also attract an ACC work levy, which depends on your classification unit and is billed separately by ACC.

When do I have to pay the extra tax?

The additional tax is due as terminal tax after you file your return for the year. If it exceeds the residual income tax threshold, you will also be brought into the provisional tax regime for the following year, which means paying that year's tax in instalments while still settling the previous year. That combination is what makes the second year harder than the first, and it is worth planning for before it arrives.

What percentage of my side income should I set aside?

Use the reserve percentage this calculator produces rather than a rule of thumb, because the right figure depends entirely on what your salary has already used up. Two people earning the same side income can owe very different amounts: one on a $50,000 salary and one on a $150,000 salary face different marginal rates on the very same work. The percentage shown is calculated against the gross side income, so it can be applied to each payment as it arrives.

Self-Employed Emergency Fund Calculator NZ 2026

How much emergency fund does a self-employed person in New Zealand need?

More than an employee, and the right amount depends on your own income pattern rather than a rule. The useful measure is the gap between your fixed costs and your worst realistic month, multiplied by how long a bad run might last, plus any tax you have collected but not yet paid. For steady contracting that can be less than three months of expenses; for lumpy project work it is often more than six.

Why does the three to six months rule not work for the self-employed?

Because it was written for employees, whose income either arrives in full or stops entirely. Self-employed income rarely goes to zero; it sags. A rule based on total expenses over-saves for someone whose worst month still covers half their costs, and under-saves for someone facing a provisional tax instalment in the same quarter.

Should tax money count as part of my emergency fund?

No. Tax you have reserved against income already earned belongs to Inland Revenue and is simply sitting in your account until the due date. Counting it as a buffer is the most common reason a self-employed person appears to have savings and then cannot pay a tax bill. This calculator treats it as a separate layer on top of the buffer.

Where should a self-employed emergency fund be held?

Somewhere you can reach within a day or two and cannot spend by accident, which usually means a separate on-call account rather than a term deposit or the account your card is attached to. The return matters far less than the availability: a buffer that is locked up for 90 days is not a buffer.

Does ACC cover me if I cannot work?

ACC covers injury, not illness and not a shortage of work, and payments are based on your past earnings rather than your current commitments. It also does not start immediately. An emergency fund covers the cases ACC does not, which are the more common ones.

Self-Employed Parental Leave Calculator NZ 2026

How much is paid parental leave for a self-employed person in New Zealand?

It is your average weekly income, capped at $811.05 a week gross and with a floor of $239.50 a week for self-employed parents, for the year from 1 July 2026 to 30 June 2027. Payments run for up to 26 weeks and are paid fortnightly.

How is average weekly income calculated for a self-employed parent?

You can use either of two methods and take whichever gives more: net self-employed income over the 12 months before the due date divided by 52, or net income over a continuous 6 month period in that time divided by 26. The six month method usually wins if your income was concentrated or rising.

Am I eligible for paid parental leave if I am self-employed?

You need to have worked an average of at least 10 hours a week in any 26 of the 52 weeks before the baby's due date, or before you became the primary carer. The 26 weeks do not have to be continuous, which matters for anyone with irregular work.

Why is there a minimum payment for the self-employed but not employees?

Because self-employed income can legitimately be very low or briefly negative while the business is still real work. The minimum, set at 10 hours at the adult minimum wage, ensures a self-employed parent who qualifies is not paid nothing. Employees have no equivalent floor because their pay is already at least the minimum wage.

Is paid parental leave taxed?

Yes. The rates quoted are gross, and tax is deducted before payment. Parental leave payments also count as income for the year, so they interact with any other income you earn and with Working for Families entitlements.

Self-Employed Replacement Income Calculator NZ 2026

How much more do I need to earn self-employed to match my salary?

More than the salary, and how much more depends almost entirely on your business costs and how much of your time is billable. The salary itself is not the target: the target is the salary plus the employer KiwiSaver contribution, plus anything else the employer paid for, plus the ACC work levy you now carry, plus your own running costs. On a typical set of assumptions that is a revenue figure 10 to 20 percent above the salary, and the day rate implied by it can be double what the salary works out to per day, because you are billing far fewer days than you are paid for as an employee.

Do I pay more ACC as a sole trader?

Yes, but less than people expect, because part of what you pay you were already paying. An employee pays the ACC earner levy through PAYE, and a self-employed person pays that same earner levy on their income, so it is not an extra cost of going self-employed. What is extra is the work levy and the Working Safer levy, which an employer used to pay on your behalf and which you now pay yourself. Those rates depend on your classification unit and vary widely between occupations, so this calculator asks for the rate rather than assuming one.

Why is the day rate so much higher than my salary divided by working days?

Because an employee is paid for roughly 260 days a year and a self-employed person bills far fewer. Four weeks of annual leave, twelve public holidays and a handful of sick days remove about 37 days before you start. Then quoting, invoicing, chasing payment, admin and business development remove a further share of what is left, commonly 20 to 30 percent. A salary spread over 260 paid days becomes a rate charged over perhaps 170 to 180 billable ones, and that alone accounts for most of the difference.

Should I include income protection insurance?

It is worth pricing in, because sick leave is one of the entitlements that disappears entirely and ACC only covers injury, not illness. A New Zealand employee accrues ten days of paid sick leave a year; a sole trader who is unwell simply does not earn. Whether the premium is deductible depends on the policy, broadly on whether any benefit paid out would itself be taxable, so check the specific product rather than assuming either way.

Does this account for tax?

It compares pre-tax amounts, which is the honest comparison, because salary and self-employed profit are taxed on the same brackets at the same rates. A dollar of profit and a dollar of salary attract the same income tax, so adding tax to both sides would change both figures without changing the answer. What does differ is timing: PAYE comes out as you are paid, whereas self-employed tax arrives as a terminal tax bill and then as provisional instalments, which is a cashflow problem rather than a cost.

Debtor Days Calculator NZ 2026

What are debtor days?

Debtor days is the average number of days between issuing an invoice and receiving the money. It is calculated as money owed to you divided by revenue invoiced, multiplied by the number of days in the period. A figure of 45 means that on average you wait about six and a half weeks to be paid.

Should I include GST in the debtor days calculation?

Be consistent. If you include GST in the amount owed you must include it in revenue too, otherwise the ratio is wrong and your debtor days come out roughly 15 percent too high. This calculator asks for both figures excluding GST, which is the cleaner comparison.

What are good debtor days for a sole trader in New Zealand?

There is no universal benchmark, because it depends entirely on the terms you offer. The useful comparison is against your own terms: if you offer 20 days and your debtor days are 45, you have 25 days of slippage to work on. Trades and consultancies working for large organisations commonly sit between 40 and 60.

Why is a one-off snapshot of debtor days misleading?

Because the amount owed on any single day depends on when you last invoiced. Measure it on the same day each month, or use a period of at least three months, so a large invoice issued the day before you measured does not distort the result.

Does reducing debtor days give me more money?

It gives you the money sooner, once. Cutting your collection period from 45 days to 30 releases 15 days of revenue as a one-off injection of cash, and after that you are simply operating with less capital tied up. The ongoing benefit is the financing cost you no longer carry.

GST Change of Use Adjustment Calculator NZ

What is a GST change of use adjustment in NZ?

A GST change of use adjustment is required when the actual business use of an asset differs from your original estimate at the time you claimed input tax. The GST Act treats changes in use as a self-supply: if business use increases above your original estimate you can claim more input tax, and if business use decreases below your estimate you must pay output tax to reverse the over-claimed credit.

When is a GST adjustment required?

A wash-up adjustment is only required when the percentage actual use at the end of an adjustment period deviates by 10 percentage points or more from the percentage intended use, OR when the dollar difference exceeds $1,000 even if the percentage change is smaller. Below both thresholds, no adjustment is needed and the original input tax claim stands. The annual adjustment period typically runs for the income year.

How is the GST adjustment formula calculated?

The formula is: Adjustment = Total input tax × (percentage actual use − percentage intended use). A positive result means you can claim additional input tax. A negative result means you must pay output tax to reverse the over-claimed amount. The adjustment is included in your GST return for the period in which the adjustment period ends.

How many adjustment periods do I need to track?

The number of adjustment periods depends on the asset value: assets up to $5,000 (GST exclusive) need no adjustment after year 1; assets up to $10,000 need 2 annual adjustments; up to $500,000 need 5 annual adjustments; and assets over $500,000 (such as land and buildings) need 10 annual adjustments. After the final adjustment period, no further wash-ups are required.

GST Basis Switcher NZ

What is the difference between invoice and payments basis for GST?

Under the invoice basis, you pay GST on sales when you ISSUE an invoice (regardless of whether the customer has paid) and claim GST on purchases when you RECEIVE an invoice. Under the payments basis, you pay GST on sales only when you actually RECEIVE payment, and claim GST on purchases only when you actually PAY. The payments basis is much better for cash flow because you don't pay GST on unpaid invoices, but it is only available to businesses with turnover of $2 million or less.

Who can use the payments basis for GST in NZ?

Businesses with total taxable supplies of $2,000,000 or less in the past 12 months, AND who do not expect supplies to exceed $2,000,000 in any forward 12-month period beginning on the first day of any month. Non-profit bodies can use the payments basis regardless of turnover. If you exceed the $2m threshold, you must switch to the invoice basis (or use the hybrid basis as a transition).

What is the GST hybrid basis?

The hybrid basis combines invoice and payments accounting: GST on sales is accounted for using the invoice basis (when issued), but GST on purchases is accounted for using the payments basis (when paid). This is uncommon and rarely advantageous. It might suit a business with mostly cash sales but slow-paying suppliers, but most businesses are better with one of the pure bases. Any GST-registered person can elect the hybrid basis.

How do I switch GST bases in NZ?

Apply through myIR (or write to IRD) explaining your reason for the change. The change typically takes effect from the start of your next GST taxable period. When switching from payments to invoice basis (e.g. when crossing the $2m threshold), you may need to make a one-off transitional adjustment to capture invoices outstanding at the switch date. IRD will confirm the effective date and any adjustments needed.

GST De-registration Calculator NZ

When can I de-register from GST in NZ?

You can apply to cancel your GST registration if your turnover has dropped (and is expected to remain) below the $60,000 threshold, you have stopped your taxable activity, or you sold or closed your business. You MUST cancel your registration within 21 days if you stop your taxable activity and don't intend to start a new one within 12 months. If your turnover stays above $60,000 you cannot de-register.

Do I owe GST when I de-register?

Yes. The GST Act treats any business assets you keep at de-registration as if you sold them to yourself at open market value. You must pay GST output tax on this 'deemed supply' in your final GST return. This includes vehicles, equipment, inventory, and even land or buildings used in the business. The rule prevents you from claiming GST on a business asset purchase and then keeping it for private use after de-registering.

How is the deemed supply value calculated?

The deemed supply is calculated at open market value (the price the asset would fetch if sold to an independent third party at the de-registration date), and the output tax is 3/23 of that market value. You can value at depreciated book value if it reasonably approximates market value, but for distinctive assets (vehicles, real estate) get a market valuation. Assets with no business use at de-registration (you've already disposed of them or written them off) are not part of the deemed supply.

What happens if I miss the 21-day de-registration window?

You remain GST-registered and must keep filing returns. You may have to pay GST on any payments you collect for past taxable activities even if you're no longer trading. IRD can also back-date your de-registration to the actual date you ceased taxable activity, which may trigger interest and penalties on the deemed supply tax that should have been paid then. Best practice: notify IRD via myIR within 21 days of stopping your taxable activity.

GST on Entertainment Calculator NZ

How does GST apply to entertainment expenses in NZ?

If the entertainment is 100% income tax deductible (e.g. light meals at a board meeting, conference catering, overseas entertainment), you can claim 100% of the GST. If the entertainment is only 50% deductible (client lunches, Christmas parties, corporate boxes), you can initially claim 100% of the GST during the year and then make a year-end adjustment to pay back GST on the 50% non-deductible portion. Most businesses make this adjustment in their March GST return.

What entertainment is 50% deductible?

50% deductible entertainment includes: meals and drinks at restaurants with clients or staff, Christmas parties, year-end social events, food and drink at corporate boxes or yachts, gifts of food and drink (wine, hampers), social events at the office for staff, and entertainment with a 'significant private element'. The 50% rule applies even if you think the private element was more or less than 50% - it's a fixed statutory split.

What entertainment is 100% deductible?

100% deductible entertainment includes: light meals at board meetings or for senior managers consumed as part of duties, food and drink at conferences lasting 4+ hours, meals while travelling on business (unless with a client), entertainment that promotes the business and is open to the public, freebies and trade displays, samples for advertising, entertainment provided in the ordinary course of business (restaurant providing meals), and ALL entertainment enjoyed outside New Zealand.

How do I make the GST adjustment for 50% deductible entertainment?

Add up all the GST you claimed on 50% deductible entertainment during the year. Multiply by 50% to get the non-deductible portion of the GST. Add this amount to box 9 (adjustments) of your GST return for the period that includes your income tax balance date (typically March). For example, $1,000 of GST claimed on entertainment during the year produces a $500 GST adjustment in your March return.

GST Mixed-Use Asset Calculator NZ

What is a mixed-use asset for NZ GST purposes?

A mixed-use asset is a holiday home, bach, boat, or aircraft (boats and aircraft must cost $50,000 or more) used during a tax year both to derive income (typically short-term rental) AND for private purposes by the owner or their family. The asset must also be unused for at least 62 days in the year. From 1 April 2024, the special section 20G calculation is no longer mandatory; general GST apportionment rules apply, with the old method allowed as a fair and reasonable approach.

How is the GST claim calculated on a mixed-use holiday home?

The income-earning use percentage is calculated as: income-earning days divided by total used days (income-earning days + private days). Days the asset sits empty are excluded. This percentage is applied to mixed expenses (rates, insurance, repairs, depreciation). Expenses that relate solely to income-earning use (advertising, cleaning between guests) are 100% claimable. Expenses that relate solely to private use (no claim).

Can I opt out of the mixed-use rules?

Yes, if your gross income from the income-earning use of the asset is less than $4,000 in the tax year, you can opt out and exclude both the income and the expenses from your GST and income tax returns. This is useful for low-frequency rentals where the compliance work outweighs the benefit. Once you opt out, you cannot claim any GST on the asset's expenses for that year.

What is the $50,000 threshold for boats and aircraft?

Boats and aircraft are only mixed-use assets if they cost $50,000 or more (or had a market value of $50,000 or more if not acquired at market value). Below this threshold, the standard general apportionment rules apply. Holiday homes have no minimum threshold - any short-term rental property used privately is potentially a mixed-use asset. The $50,000 threshold is calculated on the cost to the partnership or LTC, not to individual partners.

GST Reverse Charge Calculator NZ

What is the GST reverse charge in NZ?

The reverse charge is a self-assessment GST mechanism under section 8(4B) of the GST Act 1985. When a NZ recipient imports services from overseas and intends to use them for less than 95% taxable purposes, the recipient must self-assess GST on the value of the services as if they had supplied the services to themselves. This prevents NZ businesses making exempt supplies (banks, financial services) from gaining a tax advantage by sourcing services offshore where no NZ GST is charged.

When does the 95% threshold apply?

At the time you acquire the imported service, you assess your intended taxable use percentage. If you intend to use the service less than 95% for taxable supplies, the reverse charge applies immediately and you self-assess GST on the full value. If you intend 95% or more taxable use, no reverse charge is needed at acquisition - but a secondary 90% test applies later if your actual use drops.

When does the 90% threshold trigger a later adjustment?

If your original intended taxable use was 95% or more (so no reverse charge was needed at acquisition), but your actual taxable use over the adjustment period drops below 90%, a deemed self-supply is triggered. The time of supply is the last day of the adjustment period in which use dropped below 90%. You then self-assess GST on the value of the services and apply the apportionment rules for the appropriate portion.

Do I need to register for GST if I receive imported services?

If you are not GST-registered and the value of imported services subject to the reverse charge takes your annual turnover (including the imported services) above the $60,000 GST registration threshold, you must register for GST. This catches non-resident-facing businesses (often financial services or residential property businesses) that source services from offshore. Once registered, you self-assess GST under the reverse charge and account for it through your normal GST returns.

GST Second-Hand Goods Calculator NZ

Can I claim GST on a used car bought from a private seller in NZ?

Yes, if you are GST-registered and the car will be used in your taxable activity. Even though the private seller does not charge GST, section 3A of the GST Act allows the GST-registered buyer to claim a second-hand goods input tax credit of 3/23 of the purchase price. For example, a $10,000 used car from a private seller produces a $1,304.35 GST credit when used 100% for business.

What are the requirements for claiming the second-hand goods credit?

Five requirements: (1) you must be GST-registered, (2) the goods must have been used and previously paid for by someone else (genuinely second-hand), (3) the goods must be in NZ at the time of purchase, (4) the goods must be used to make taxable supplies, and (5) you must keep records including the seller's name and address, date of purchase, description, quantity, and price. Livestock and goods made from fine metal are excluded from the second-hand goods rules.

What if I buy from an associated person?

When the seller and buyer are associated persons (related companies, trusts, family), the input tax credit is limited to the LESSER of three amounts: the GST component of the original cost to the seller (if any), the tax fraction (3/23) of the purchase price, and the tax fraction of the open market value. This prevents inflated credits on transfers within related groups. From 30 March 2022 the rules were further tightened to prevent stepped-up credits across multiple associated transfers.

When can I claim the credit if I pay in instalments?

On the payments basis, you claim the credit in the period you actually make the payment. If you pay in instalments, you claim the GST proportionally in the period each instalment is paid. On the invoice basis, you claim the full credit in the period the goods are supplied (regardless of payment timing). Hire purchase arrangements have special rules: the full GST credit is claimed in the period the agreement is entered into, regardless of accounting basis.

GST Zero-Rated Supply Checker NZ

What is a zero-rated supply for NZ GST?

A zero-rated supply has GST applied at 0% rather than 15%. The supplier doesn't collect GST from the customer but CAN still claim input tax credits on related expenses. This is different from an exempt supply (no GST collected and no input credits). Common zero-rated supplies include exports, land transactions between two GST-registered parties, and the sale of a business as a going concern.

When is a sale of land zero-rated for GST?

Compulsory zero-rating applies to a sale of land if both parties are GST-registered, the buyer intends to use the land for taxable supplies, and the land is not intended to be the buyer's (or an associate's) principal place of residence. The transaction must include some interest in land. The sale and purchase agreement should specify whether the supply is zero-rated, and the seller should not charge GST on a zero-rated transaction.

What is a 'going concern' for GST?

A going concern is the sale of a business as a continuing operation, with all assets and operations transferring such that the buyer can continue running the business. Both parties must be GST-registered, both must agree in writing that the supply is the supply of a going concern, and the supply must be the SAME taxable activity that the seller carried on. Asset-only sales are not going concerns.

Are exports always zero-rated?

Generally yes, but with conditions. Goods physically exported from NZ within 28 days (or longer with IRD approval) are zero-rated. Services supplied to a non-resident outside NZ are typically zero-rated. There are exceptions for services performed on goods inside NZ for a non-resident (zero-rated only if the goods are subsequently exported). Documentation requirements are strict: keep export shipping documents and customs records.

ACC for the Self-Employed

Do self-employed people pay ACC?

Yes. The self-employed pay ACC levies based on their income and the risk classification of their work, invoiced by ACC after they file their tax return.

What is ACC CoverPlus?

CoverPlus is the standard ACC cover for self-employed people, paying weekly compensation based on your previous year's earnings if an injury stops you working.

What is CoverPlus Extra?

An optional agreed-cover option where you and ACC agree a set level of cover in advance, useful if your income varies or you want certainty about a payout.

How much are self-employed ACC levies?

They depend on your liable income and your business's risk classification, so a higher-risk trade pays more. ACC publishes the current rates.

Australian GST Guide for NZ Businesses

What is the Australian GST rate?

Australia's GST is 10%, compared with New Zealand's 15%.

How do I add Australian GST to a price?

Multiply the GST-exclusive price by 1.1 to add 10% GST.

How do I remove Australian GST from a total?

Divide the GST-inclusive total by 11 to find the GST amount, or by 1.1 to get the GST-exclusive price.

Is Australian GST the same as New Zealand GST?

The concept is the same, but the rate differs (10% versus 15%) and the registration thresholds and rules are different.

Contractor Tax Basics Guide

How is contractor income taxed in New Zealand?

Contractors pay income tax on their net profit, often through schedular payments with withholding tax, and may also manage provisional tax and GST.

Do contractors have to pay GST?

If your turnover exceeds the $60,000 registration threshold over 12 months you must register for and charge GST. Below that it is voluntary.

What expenses can contractors claim?

Genuine business costs such as tools, work vehicle running costs, a home-office portion, software and professional fees, with records kept.

Do contractors pay ACC?

Yes. The self-employed pay ACC levies based on their liable income and business classification, invoiced after filing.

GST-Inclusive vs GST-Exclusive Pricing

What is the difference between GST-inclusive and GST-exclusive prices?

A GST-exclusive price is before 15% GST is added; a GST-inclusive price already contains the GST. Businesses often quote exclusive prices, while consumer prices must be shown inclusive.

How do I add GST to a price?

Multiply the GST-exclusive amount by 1.15. For example, $100 plus GST is $100 times 1.15, which is $115.

How do I find the GST content of an inclusive price?

Multiply the GST-inclusive total by 3 and divide by 23, or simply divide the total by 23 for the GST share. Taking 15% of the inclusive price gives the wrong answer.

Do prices shown to consumers have to include GST?

Yes. Prices advertised to the public in New Zealand must be GST-inclusive, so the price you see is the price you pay.

GST Registration for Small Business

When must I register for GST?

When your turnover exceeds $60,000 in any 12-month period, or you expect it to. Below that, registration is voluntary.

What is the GST registration threshold?

It is $60,000 of turnover over a rolling 12 months. Crossing it makes GST registration compulsory.

Should I register for GST voluntarily?

It can make sense if you have significant GST on expenses to claim back, but it adds filing obligations and means charging GST to customers.

How often do I file GST returns?

Monthly, two-monthly or six-monthly depending on turnover, with two-monthly the default for most small businesses.

Provisional Tax Explained Guide

What is provisional tax?

It is a way of paying income tax in instalments during the year rather than as one lump sum, if your residual tax is over the threshold. It is not a separate tax.

Who has to pay provisional tax?

Generally people with residual income tax above the threshold for the year, such as the self-employed, contractors and investors with untaxed income.

What are the provisional tax methods?

The standard, estimation and accounting income method (AIM). The standard method bases instalments on last year tax plus an uplift; AIM uses your actual results through accounting software.

How do I avoid use of money interest?

Pay the right amounts by the instalment dates, or use AIM. Safe-harbour rules protect smaller taxpayers who pay the standard amounts on time.

Self-Employed Tax - Getting Started Right (NZ)

How do I pay tax when self-employed?

You pay income tax on your net profit, file an annual return, and usually pay provisional tax in instalments once your tax bill passes the threshold.

What is provisional tax?

Paying next year expected income tax in instalments through the year, rather than as one lump sum, based on your last return or an estimate.

Do I need to register for GST?

Only if your turnover exceeds $60,000 over 12 months, though you can register voluntarily below that.

What expenses can I claim?

Genuine business costs such as tools, a home-office portion, work vehicle costs, software and professional fees, with good records kept.

ACC Levy Calculator Self-Employed

What is liable income for ACC?

It is the income from your self-employment that ACC charges levies on, generally your net profit from active work. It is subject to an annual minimum and maximum, so amounts outside those bounds are adjusted before the levy is worked out.

Where do I find my levy rate?

Your rate per $100 comes from your ACC classification unit, which reflects your occupation, plus the flat Earners levy. You can find both on your ACC invoice or the ACC website and add them together for the rate to enter here.

Is this my exact ACC bill?

No. It is an estimate based on the figures you enter. Your actual invoice depends on ACC's current rates, thresholds, and your confirmed classification, so treat this as a planning guide only.

Airbnb GST Threshold Calculator NZ

When must I register for GST as an Airbnb host?

Registration is compulsory once your total turnover from taxable activities reaches $60,000 in any 12-month period. It is the gross income that counts, not your profit. You can also register voluntarily below the threshold to claim GST on expenses, though that has trade-offs.

Is it turnover or profit that counts?

Turnover, meaning your gross income from the taxable activity, not your profit after expenses. So it is the total rental income from your short-stay activity that is compared with the $60,000 threshold. This calculator projects that turnover from your rate and nights.

What happens when I sell the property?

If the property has been part of a GST-registered activity, GST can apply on its sale, which can be a large and unexpected cost. The short-stay accommodation rules are complex, so get advice from Inland Revenue or an accountant before registering or selling.

Car Depreciation Calculator NZ

How fast do cars depreciate?

A new car often loses around 15% to 20% of its value each year, with the biggest drop in the first year. Used cars depreciate more slowly. The exact rate depends on the make, condition, mileage, and demand, so treat the result as a guide.

What is the declining balance method?

Declining balance applies the depreciation rate to the value left each year, not the original price. So the dollar loss is largest at the start and shrinks as the car ages, which matches how real vehicle values behave.

Why does depreciation matter?

Depreciation is usually the biggest cost of owning a car, often more than fuel or servicing. Knowing the likely resale value helps you compare cars, decide when to sell, and understand the true cost of buying new versus used.

Chattel Depreciation Calculator NZ

What is the diminishing value method?

It applies a fixed depreciation rate to an asset's remaining book value each year, so the deduction is largest in the first year and shrinks over time. This reflects how most assets lose value fastest when new. It is the most common method used for chattels in New Zealand.

Which chattels can I depreciate?

Separately identifiable, movable items such as carpets, curtains, appliances, a heat pump and furniture can usually be depreciated, while the building itself generally cannot. Inland Revenue publishes depreciation rates for each asset type, so use the correct rate for the specific chattel.

Is depreciation taxable when I sell?

It can be. If you sell an asset for more than its depreciated book value, some of the depreciation you claimed may be clawed back as taxable depreciation recovery. This calculator estimates the deductions only; check the rules with Inland Revenue or your accountant before selling.

Company Tax and Imputation Calculator NZ

What is the company tax rate in New Zealand?

The company tax rate is 28 percent of taxable profit. A company pays this on its profit and can then distribute the after-tax profit to shareholders as dividends, attaching imputation credits for the tax already paid.

What are imputation credits?

Imputation credits represent the company tax already paid on profits. When a fully imputed dividend is paid, shareholders receive credits equal to that tax, so the same profit is not taxed twice. Shareholders use the credits against their own tax on the dividend.

Does the shareholder pay more tax?

It depends on their rate. A shareholder on 33 or 39 percent pays the difference above the 28 percent already paid, while one on a lower rate may have excess credits. Use the dividend gross-up calculator to see the shareholder side.

Contractor GST Threshold Calculator NZ

When must I register for GST in New Zealand?

You must register for GST if your turnover from a taxable activity is over the registration threshold in any 12 month period, or you expect it to be. The threshold has been $60,000 for some time; check the current figure with Inland Revenue.

What happens when I register for GST?

You add GST to your prices and pass it to Inland Revenue, but you can also claim back the GST on your business expenses. For clients who are themselves GST registered, charging GST makes no real difference to them.

Should I register voluntarily under the threshold?

You can register voluntarily below the threshold, which lets you claim GST on expenses but means more paperwork and adding GST to prices. Whether it is worth it depends on your costs and who your clients are.

IRD Depreciation Rate Finder NZ 2026-27

What is the difference between DV and SL depreciation methods in NZ?

DV (Diminishing Value) applies the percentage to the remaining book value each year, giving larger deductions early on. SL (Straight Line) applies the percentage to the original cost, giving equal deductions each year. Most businesses choose DV for a faster initial tax deduction.

Can I change depreciation method once I have started?

Yes, you can switch from DV to SL at any time, but you cannot switch from SL to DV. The switch is made in the year you change.

Where does IRD publish the full depreciation rate schedule?

IRD publishes the General Depreciation Rates schedule at ird.govt.nz. The schedule is in Determination DEP1 through DEP100+ and is updated periodically.

Depreciation Recovery Calculator NZ

What is depreciation recovery?

It is the depreciation clawed back and taxed when you sell a business asset for more than its adjusted tax value. Selling above that value shows you claimed too much depreciation, so the over-claimed amount is taxed as income in the year of sale.

How is it calculated?

Work out the adjusted tax value, the original cost minus depreciation claimed. If the sale price is higher, the recovery is the sale price, capped at the original cost, minus the adjusted tax value. This calculator applies that, and shows any amount above the original cost separately.

Is selling above the original cost recovery too?

No. You cannot recover more depreciation than you claimed, so any proceeds above the original cost are not depreciation recovery. That portion is generally a non-taxable capital amount, though other rules can apply. Confirm the treatment with an accountant.

FBT De Minimis Calculator NZ

What are unclassified fringe benefits?

They are miscellaneous benefits given to staff that do not fall into the main FBT categories, such as gifts, prizes and occasional small non-cash rewards. The de minimis exemption lets small, infrequent unclassified benefits avoid FBT, provided both thresholds are met.

What are the FBT de minimis thresholds?

Unclassified benefits are exempt only if both limits are met: no more than $300 per employee per quarter, and no more than $22,500 in total across all employees per year. If either is exceeded, FBT applies to all the unclassified benefits.

What happens if I exceed a threshold?

If either the per-employee quarterly limit or the annual employer limit is breached, the exemption is lost and FBT applies to all the unclassified benefits for the period, not just the amount over the limit. This is why both limits need watching.

FBT Vehicle Calculator NZ

When is FBT payable on a vehicle?

When an employer makes a vehicle available for an employee's private use, including having it available at home, FBT generally applies, whether or not it is actually driven privately. The tax is based on the vehicle's value, not actual private running costs.

How is the FBT taxable value calculated?

Under the cost method, the annual taxable value is 20 percent of the vehicle's GST-inclusive cost. The alternative is 36 percent of the tax book value. FBT is then charged on the taxable value at the FBT rate. This calculator uses the simpler cost method.

Can FBT on a vehicle be reduced?

Yes. Days the vehicle is genuinely unavailable for private use can be excluded, and certain work-related vehicles, such as sign-written utes with private-use restrictions, can be exempt. The rate also depends on whether you use the single rate or attribute benefits. Confirm with Inland Revenue.

GST Exclusive Calculator NZ

How do I find the GST-exclusive amount?

Divide the GST-inclusive total by 1.15. For example, a $115 total divided by 1.15 is $100 GST-exclusive, with $15 of GST. Do not subtract 15%, which gives the wrong answer.

What is the IRD 3/23 method?

To extract the GST content from a GST-inclusive total, multiply the total by 3 and divide by 23. For $115, that is 115 times 3 divided by 23, which equals $15. This is the method Inland Revenue uses and avoids rounding drift.

Why is 15% of the total not the GST?

Because the GST is 15% of the exclusive price, not the inclusive total. Taking 15% of a $115 total gives $17.25, which is too high. The correct GST is $15, found by dividing by 1.15 or using the 3/23 fraction.

GST Return Calculator NZ

How do I work out GST to pay?

Find the GST on your sales (sales times 3 over 23) and the GST on your expenses the same way, then subtract. If the GST on sales is higher, you pay the difference to Inland Revenue; if expenses carried more GST, you receive a refund. This calculator does it for you.

Why divide by 23 and multiply by 3?

Because a GST-inclusive price is the net amount plus 15 percent, which is 115 percent of the net. The GST portion is therefore 15 over 115, which simplifies to 3 over 23. Multiplying a tax-inclusive figure by 3 over 23 extracts the GST it contains.

When do I get a GST refund?

When the GST on your expenses exceeds the GST on your sales for the period, the difference is refunded to you. This often happens after a large purchase, during start-up, or in a quiet sales period. The calculator shows a refund when expenses carry more GST.

Home Office Setup Cost Calculator NZ 2026

How much does a home office setup cost?

A functional setup often runs $1,500 to $4,000 once a desk, chair, computer, monitor and accessories are included, with the computer and chair the biggest items. A premium ergonomic setup costs more. This calculator totals your specific choices.

Can I claim a home office setup on tax?

If you are self-employed or run a side business, equipment and a portion of home running costs may be deductible, with larger items depreciated over time. Keep receipts and check with your accountant or use the working-from-home deduction calculator.

What should I prioritise in a home office?

A good chair and a comfortable desk height protect your back over long hours, and a reliable computer and monitor improve productivity. These are worth prioritising over cosmetic items, and spreading the cost over three years shows the modest monthly impact.

Look-Through Company (LTC) Tax Calculator NZ

What is a look-through company?

An LTC is a New Zealand company that has elected to be transparent for tax, so its income and losses pass through to the owners and are taxed in their personal returns at their personal rates, rather than the company paying the flat 28 percent rate itself.

When is an LTC tax-advantageous?

When owners are on personal rates below 28 percent, or when the company makes losses that can offset the owners' other income. For owners already on high personal rates, the 28 percent ordinary company rate can be lower, so the structure cuts both ways.

Why does my other income matter?

Because LTC profit stacks on top of your other income, the marginal rate applied to it depends on how much you already earn. Higher other income pushes your LTC share into higher tax bands, which can make an ordinary company more attractive.

Marketplace Fees & GST Calculator NZ 2026

How much do marketplaces take from a sale?

It varies, but a success or selling fee of several percent plus a payment processing fee of around 2 to 3 percent is common, so 8 to 12 percent of the sale can disappear in fees. Enter your platform's actual rates here to see the exact net.

Do I pay GST on marketplace sales?

If you are GST registered, the price you charge includes GST, of which three twenty-thirds must be passed to Inland Revenue. You can usually claim the GST on the platform fees. If you are not registered, GST does not apply to your sale.

Why is my payout less than the sale price?

Because the platform's success fee, the payment processor's percentage, and any GST you must remit all come out of the sale price. Pricing off the sticker value alone overstates your profit; this calculator shows what actually reaches you.

Mileage Reimbursement Calculator NZ

What are the IRD kilometre rates?

IRD publishes kilometre rates to reimburse business vehicle use. A higher tier one rate covers the first 14,000 km travelled in the year (business and private combined), and a lower tier two rate applies to business kilometres beyond that. The rates are updated annually.

Who can use these rates?

Self-employed people and businesses can use them to claim or reimburse the cost of using a vehicle for work, as an alternative to recording actual running costs. Employers can also use them to reimburse employees tax-free for work travel.

What records do I need?

You need a log of your business kilometres, ideally a logbook covering a representative period. The tier one rate only applies to the first 14,000 km of total travel, so you also need to know your total kilometres for the year.

New Build GST Calculator NZ

Does a new build include GST?

Yes. A new build (a new home or section sold by a GST-registered developer) includes 15% GST in the price, unlike most existing homes sold by private owners, which are not subject to GST. So the headline price already has the GST built in.

How do I find the GST in a new build price?

The GST portion of a GST-inclusive price is the price multiplied by 3 and divided by 23. This calculator does that, and also shows the GST-exclusive build cost, which is useful for builders and developers pricing contracts.

Do I pay GST on top of a new build price?

Usually the advertised price is GST-inclusive, so you do not add GST on top. Always check whether a build contract is quoted including or excluding GST, as the difference is large.

Discount & GST Calculator NZ 2026

Do I apply the discount or GST first?

Apply the discount first. If the price already includes GST (a consumer price), the discounted figure is your final price and the GST sits inside it. If the price excludes GST (a trade price), add 15 percent GST to the discounted amount to reach the final price.

How do I find the GST inside a price?

For a GST-inclusive price, the GST component is three twenty-thirds of it, which is the same as dividing by 1.15 and subtracting. This calculator shows the GST component automatically so you can itemise it for an expense claim or return.

What is the difference between GST-inclusive and exclusive?

GST-inclusive prices already contain the 15 percent GST, as shown to consumers. GST-exclusive prices, common in trade and wholesale quotes, do not, so 15 percent must be added. Choosing the right mode here ensures the discount and GST are applied correctly.

Proposed Business Tax Calculator NZ

What is the company tax rate in New Zealand?

The New Zealand company tax rate is 28 percent, applied to taxable profit. Any other rate shown by this calculator is hypothetical and is there so you can model the effect of a change that has not been legislated.

Is taxable profit the same as accounting profit?

No. Taxable profit starts from accounting profit and then adjusts it: some expenses such as certain entertainment costs are not fully deductible, and tax depreciation often differs from accounting depreciation. Enter your taxable profit rather than the figure in your accounts.

How does imputation affect a company rate change?

New Zealand attaches imputation credits to dividends for the company tax already paid, so shareholders are not taxed twice on the same profit. A change in the company rate therefore changes the size of the credit as well as the tax, which shifts the timing of tax as much as the total.

Provisional Tax Uplift Calculator NZ

What is the standard uplift method for provisional tax?

Under the standard uplift method, this year provisional tax is based on last year residual income tax plus an uplift percentage, commonly 105% if last year return was filed on time. It is paid in instalments through the year.

How many provisional tax instalments are there?

Most provisional taxpayers using the standard method pay in three instalments across the year. The exact due dates depend on your balance date, with a 31 March balance date commonly having instalments in August, January and May.

Should I use the uplift method or estimate?

The uplift method is simple and gives certainty. Estimating can be better if your income has dropped, so you do not overpay, but it carries more risk if you under-estimate. This calculator shows both so you can compare.

Terminal Tax Calculator NZ

What is terminal tax?

Terminal tax is the final amount payable after the year's actual tax liability is compared with the provisional tax already paid. If you underpaid provisional tax, the shortfall is terminal tax; if you overpaid, you get a refund. It squares up the year.

What is residual income tax?

Residual income tax, or RIT, is your total income tax liability for the year after deducting tax credits, but before provisional tax payments. It is the figure compared against your provisional tax to work out the terminal tax to pay or refund.

What if I underpaid provisional tax?

You pay the shortfall as terminal tax, and a significant underpayment can attract use-of-money interest from Inland Revenue. Options such as tax pooling can reduce the interest cost of catching up. Keeping provisional payments close to the final liability avoids this.

Self-Employed ACC Levy Calculator NZ

What ACC levies do self-employed people pay?

Self-employed people pay the ACC earners levy on their income plus a work levy based on their occupation's risk classification. Together these make up the CoverPlus levy ACC invoices each year, based on your liable earnings.

Why did I get a big ACC bill?

Unlike employees, contractors do not have ACC deducted as they go. ACC invoices you after your tax return shows your income, so the levy arrives as a lump sum. Setting money aside through the year avoids the shock.

How is the work levy set?

The work levy rate depends on your classification unit (your type of work). Higher-risk work, such as construction or forestry, has a higher rate than office-based work. This calculator lets you enter your own work levy rate.

Self-Employed Take-Home Calculator NZ

How much tax do the self-employed pay in New Zealand?

You pay income tax on your profit, which is income less expenses, across the same brackets as everyone else, plus ACC levies. There is no PAYE, so you set money aside yourself and pay through provisional tax and the year-end return.

What is the difference between turnover and take-home?

Turnover is your total income. Take-home is what is left after business expenses, income tax and ACC. The gap surprises many new business owners, which is why setting tax aside from each payment matters.

Do the self-employed pay ACC?

Yes, self-employed people pay ACC levies based on their liable earnings and their occupation classification, billed separately from income tax.

Side Hustle GST Registration Calculator NZ

When do I have to register for GST in New Zealand?

You must register for GST if your turnover from taxable activity is over 60,000 dollars in any 12-month period, or you expect it to be. Below that you can register voluntarily but do not have to.

Does a hobby or side hustle count?

If you are carrying on a taxable activity, such as selling goods or services regularly with the intention of making money, the turnover counts toward the 60,000 dollar threshold even if it is a side hustle alongside a job.

Should I register voluntarily?

It can make sense if you have a lot of GST to claim on business costs, or your customers are GST-registered. But it adds GST to your prices and means filing returns, so weigh it up. This tool checks whether registration is compulsory.

Australian GST Calculator

Does this calculator use current Australian GST rules?

Yes. It calculates Australian GST at the standard 10 percent rate in line with ATO rules. It is an Australian tool and does not use New Zealand tax rules. Results are indicative estimates and not financial or tax advice.

How Much GST Do I Add in NZ?

How much GST do I add in New Zealand?

GST in New Zealand is 15%. To add GST to a price, multiply by 1.15: a $100 item becomes $115, with $15 of GST. To find the GST already inside a GST-inclusive price, multiply by 3 and divide by 23: a $115 total contains $15 of GST.