Ceasing Self-Employment Calculator NZ 2026
Reviewed 7 August 2026. Uses 2026/27 tax rates.
Stopping is the part of self-employment nobody plans for, and it has a sting most people do not see coming. Two things happen at once and they pull in opposite directions. Because you traded for only part of the year, the provisional tax you paid was calculated on a full year of income and is usually too much, so the income tax side of the final return often produces a refund. Meanwhile, cancelling your GST registration triggers a deemed sale: every business asset you keep for yourself, the ute, the tools, the laptop, is treated as sold to you at market value, and GST becomes payable on it even though no money changed hands. That bill is real, it lands in the same period as the refund, and it is frequently larger. This calculator works both sides together, because looking at either one alone gives a badly misleading picture of what you actually owe when you close the business down.
Income tax and ACC
The GST wash-up
What the GST wash-up costs at different asset values
Selling an asset before you deregister, rather than keeping it, replaces the deemed sale with a real one at whatever price you actually get.
| Assets kept | GST payable | Final position |
|---|
The refund and the bill arrive together
The pattern is consistent enough to be worth stating plainly. Provisional tax assumes a full year of trading, so anyone who stops partway through has almost certainly overpaid, and the income tax side of the final return produces money back. At the same time, deregistering for GST creates a liability on assets you are simply keeping. People see the refund coming, spend it, and then meet the GST bill without the cash to cover it. Working both out together, before either falls due, is the entire point of doing this calculation early rather than at filing time.
The deemed sale is the part that surprises people
When you cancel a GST registration, the rules treat you as having sold every business asset you keep to yourself at open market value on the day of deregistration. You claimed GST back when you bought those assets, so the system reclaims it on the way out. No money moves, no invoice is raised, and the liability is real. It is calculated on what the asset is worth now, not what you paid, which is why an older vehicle produces a much smaller bill than a nearly new one. If you were going to sell a major asset anyway, doing so before deregistration replaces the deemed sale with an actual one, and the GST is then simply collected from the buyer rather than found from your own pocket.
Cancel in the right order
The sequence matters more than people expect. Raise your final invoices while you are still registered, because you cannot charge GST after deregistration but you still owe it on supplies made while registered, and getting that backwards means paying GST you never collected. Apply to cancel within the required timeframe once you have genuinely stopped making taxable supplies. If a provisional instalment falls due after you have stopped trading, it is usually possible to have it reduced or cancelled rather than paying it and waiting for a refund through the final return, which is worth doing simply for the cashflow.
Worked example
A sole trader stops partway through the year with $38,000.00 of net self-employed income, then takes a job paying $22,000.00 for the rest of the year, with $3,000.00 of PAYE deducted. Total income for the year is $60,000.00, on which income tax is $10,220.50 and the ACC earner levy on the self-employed portion is $665.00, a total liability of $10,885.50.
They had paid $8,000.00 of provisional tax, which with the PAYE makes $11,000.00 of credits, so the income tax side produces a refund of $114.50. However they keep business assets worth $18,000.00, and the GST content of that at 3/23 is $2,347.83, payable on deregistration. Netting the two leaves $2,233.33 to pay, which is an effective 22.06% on the year's income once everything is settled.
How this is calculated
Income tax is worked out on total income for the year using the 2026/27 rates: 10.5% to $15,600, 17.5% to $53,500, 30% to $78,100, 33% to $180,000 and 39% above that. The ACC earner levy is 1.75% on self-employed income, applied only up to the maximum liable earnings of $156,641. Credits are the PAYE already deducted plus provisional tax paid, and the residual is the liability less those credits, so a negative figure is a refund. The GST on retained assets is their GST-inclusive market value multiplied by 3/23, which is the standard extraction at a 15% rate. The final position adds the GST due and subtracts any income tax refund.
Related NZ calculators
- Leaving PAYE Mid-Year Tax Calculator for the opposite move
- GST Calculator for the 3/23 extraction on any amount
- Salary Plus Self-Employed Tax Calculator if the two overlapped
- First Year Self-Employed Tax Bill Calculator for the other end of the life cycle
- AIM vs Standard Provisional Tax Calculator for how the instalments were set
Related calculators
- Online Seller Tax Calculator NZ 2026/27: hobby or Business?
- P2P Lending Return Calculator NZ: Net Return After Defaults and Tax.
- NZ PAYE Due Dates Calculator 2026/27: Employer Payment Schedule.
- Payroll Giving Calculator NZ: Tax Credit and Net Cost of Donating.