PAY TAX
What Taxes Do I Need to Pay?
A straightforward guide to income tax and GST for new NZ businesses — what you owe, when it’s due, and how to avoid getting caught short.​
What Taxes Does a New Business Need to Pay in New Zealand?
For a new business, there are two main taxes to be aware of: Income Tax and GST.
Income Tax
You pay income tax on your profit — that’s your income minus your expenses. The tax year runs from 1 April to 31 March. You can only file your return after 31 March, which means you’re always paying tax in arrears.
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As a starting point, get into the habit of setting aside around 20% of every dollar you earn for income tax. It’s hard to do when cash is tight, but getting behind on tax is one of the hardest holes to climb out of.
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GST
Once your income is going to exceed $60,000, you need to register for GST through your MyIR account (or ask your accountant to do it). Most businesses file GST on a two-monthly basis and start on the Payments Basis, which means you only pay or claim GST once cash has actually changed hands.
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A note on filing your own returns
I don’t recommend new business owners file their own income tax returns. There are too many moving parts, and errors made early on can be expensive to fix later. I regularly work with business owners cleaning up historical years that were filed incorrectly — and the cost is almost always more than it would have been to get it right the first time.