GST Registration for Small Business
📋 When You Must Register for GST
GST, the goods and services tax, is a 15% tax on most things sold in New Zealand. If you run a business or are self-employed, there is a turnover point where registering for GST becomes compulsory. Below it, registering is optional. Knowing where you sit, and what registration means day to day, helps you stay compliant and price correctly.
The Compulsory Threshold
Turnover, Not Profit
The threshold is based on the total value of your taxable sales, not what you have left after costs. A business can be over the threshold and still not be very profitable. Watch your sales total, not your bank balance.
Our GST Registration Threshold tool helps you check where you sit against the rolling 12-month rule.
💱 How GST Works Once Registered
You Charge It and You Claim It
Once registered, you add 15% GST to your taxable sales and collect it from customers. You also claim back the GST you pay on business purchases. You send Inland Revenue the difference.
GST Is Not Your Money
The GST you collect belongs to Inland Revenue, not to you. A common cash-flow trap is spending GST that needs to be paid at the next return. Setting it aside as it comes in keeps you out of trouble.
GST-Inclusive vs GST-Exclusive Pricing
Prices to the public are usually shown GST-inclusive. Between registered businesses, prices are often quoted GST-exclusive. Be clear which you mean when quoting, so there are no surprises. Our GST Calculator adds or removes the 15% for you.
🛠️ Registering and Filing
How to Register
You register through Inland Revenue, usually in myIR. You will choose a filing frequency and an accounting basis. Registration links GST to your IRD number and business.
Filing Frequency
| Frequency | Suits |
|---|---|
| Monthly | Larger turnover or regular refunds |
| Two-monthly | Many small businesses |
| Six-monthly | Smaller businesses that qualify |
Accounting Basis
You also choose how you account for GST:
- Payments basis: GST is counted when money actually changes hands, which suits cash flow for many small businesses.
- Invoice basis: GST is counted when you invoice or are invoiced, regardless of payment.
- Hybrid: A mix, used less often.
Filing the Return
Each period you file a return showing GST collected and GST claimed, and pay or receive the difference. Keep tax invoices and records to support what you claim. Missing returns or payments leads to penalties and interest.
💡 Voluntary Registration and Mistakes
Should You Register Voluntarily?
Below the threshold you can still register. Whether it helps depends on your situation.
| For | Against |
|---|---|
| Claim GST on business purchases and start-up costs | Extra admin and returns to file |
| Looks established to business customers | Must add 15% to prices, which can deter consumers |
| Useful if you sell mainly to registered businesses | Less helpful if you sell mainly to the public |
Common Mistakes
Mistake 1: Watching Profit Instead of Turnover
The threshold is turnover. A business can cross it while barely profitable, so track sales.
Mistake 2: Spending the GST
Collected GST is owed to Inland Revenue. Spending it leaves a shortfall at return time.
Mistake 3: Registering Without Need
If you sell mainly to the public and are well under the threshold, registering can raise your prices and add admin for little gain.
Mistake 4: Poor Records
Without tax invoices you cannot properly claim GST, and your returns can be wrong.
A Simple GST Decision Path
See our Business GST Calculator for working with GST on business figures. Final word: registration is compulsory once your turnover passes $60,000, and optional below it. Once registered, you charge 15%, claim GST on purchases, and file returns, so set the GST aside and keep good records. This is general information, not tax advice, and the threshold can change, so confirm the current figure.
🎯 Test Your Knowledge
Quiz on GST Registration (20 Questions)
Frequently Asked Questions
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.
Related guides
- Depreciation for Business Assets, a related guide in the same area.
- Business Structure Basics, a related guide in the same area.