GST Registration NZ: Do You Need to Register at $60,000?
Wondering when to register for GST in NZ? The $60,000 threshold is based on your income before expenses, not your profit. Here’s how it works.
Do I need to register for GST? The $60,000 rule explained:
If you’re running a business in New Zealand, GST comes up pretty quickly. The question I get asked most is “when do I actually have to register?” Here’s the plain answer.
The $60,000 threshold
You need to register for GST when your turnover is at least $60,000 in the last 12 months, or you expect it to be at least $60,000 in the next 12 months.
Turnover means income, not profit
This is where people get caught out. The $60,000 is your sales, meaning what you’ve invoiced or been paid, before you take off any expenses. It’s not what’s left in your pocket.
So if you’ve brought in $65,000 but spent $30,000 running the business, you’ve still crossed the line. Your profit might only be $35,000, but it’s the $65,000 that counts.
It’s not just about looking back
You don’t have to wait until you’ve already hit $60,000. If you can see you’re heading there over the next 12 months, you need to register. A new business landing a big contract is a good example. Check your numbers regularly rather than waiting for a nasty surprise.
Already adding GST to your prices?
If you add GST to your prices, you need to be registered, no matter how much you earn.
You can register earlier if it suits you
You can choose to register even if you’re under $60,000. This can make sense if you have big start-up costs and want to claim the GST back, or if your customers are mostly GST-registered businesses. It’s a decision worth making on purpose, because once you’re in, you’re charging GST and filing returns.
What changes once you’re registered
- You charge 15% GST on what you sell
- You can claim back the GST on business costs
- You file GST returns and pay what you owe to IRD
- You keep proper records to back it all up
My advice on GST registration
Keep an eye on your running 12-month income, not just your financial year. If you’re getting close to $60,000, talk to your bookkeeper or accountant early so you can register at the right time and set your prices properly.
Not sure where you stand? Get in touch and we’ll have a look at your numbers together.