Whether you must register for GST.
GST registration
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Headroom to threshold
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GST within that turnover
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Your breakdown
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The $60,000 line, and why it is a rolling one
New Zealand has one GST registration threshold and it is blunt: $60,000 of taxable turnover. The catch most people miss is the word "rolling". You are over the line the moment your turnover in any 12 month window passes $60,000, or the moment you reasonably expect it will in the next 12 months. It is not tied to your tax year or to a calendar year. If you signed three contracts last week that take your next twelve months past sixty thousand, Inland Revenue expects you to register now, not at year end. This tool checks turnover against that figure and tells you whether registration is compulsory or still voluntary.
One number trips people up constantly: turnover is your sales, not your profit. A sole trader billing $72,000 with $40,000 of costs is well over the threshold even though they keep far less. The test looks only at what you invoice.
What the "GST within that turnover" figure means
If you are already charging GST, your turnover is GST-inclusive, and the tool peels out the 15 percent component so you can see how much of your headline sales is actually tax you are holding on IRD’s behalf. The arithmetic is turnover minus turnover divided by 1.15, because 15 percent GST sits on top of the GST-exclusive price. That GST is never yours to spend. It is collected from your customer and passed on, less the GST you paid on your own business costs, each time you file a return.
A contractor sitting at $72,000
Take a freelance designer who has invoiced $72,000 over the last twelve months. They are $12,000 past the threshold, so registration is compulsory. Here is what the calculator shows.
So of that $72,000, roughly $9,391 is GST that belongs to IRD once they register. The chart below splits the headline figure into the part they keep and the part they collect.
Registering voluntarily under the threshold
Below $60,000 you can still register if you want to. The trade is simple. You get to claim back the GST on your business purchases, including a one-off claim on assets you already own when you join. In return you must add 15 percent to your prices and file returns on time, usually two-monthly or six-monthly for a small operator. For someone selling mainly to other GST-registered businesses, voluntary registration often nets out positive, because your clients claim the GST back and barely notice it. If you sell to the public, adding 15 percent can make you look dearer than an unregistered competitor, so weigh it carefully.
A practical tip from doing this with founders: do not leave it to the last minute. If you can see your pipeline crossing $60,000, register a little early. Backdating and the scramble to reissue invoices with GST on them is far messier than getting ahead of it.
What happens if I go over $60,000 and do not register?
You are still liable for the GST you should have charged from the date registration became compulsory, and IRD can assess it even though you never collected it from customers. That can mean paying 3/23 of your sales out of your own pocket, plus possible penalties and interest. The threshold is a legal trigger, not a suggestion, so monitor your rolling turnover.
Does GST registration affect my income tax?
No, they are separate. GST is a tax on consumption that you collect and remit; income tax is on your profit. Registering for GST does not change your income tax bill, though your accounts become GST-exclusive, which is usually tidier. You still file an income tax return on your net profit regardless of whether you are GST registered.