New Zealand Tax Glossary for the Self-Employed

A plain-English guide to New Zealand tax terminology. Whether you are filing your first self-assessment or managing ongoing Inland Revenue obligations, this glossary covers the key terms every freelancer and sole trader should know.

When does the New Zealand tax year start and end?: The New Zealand tax year runs from 1 April to 31 March the following year. For example, the 2024/25 tax year runs from 1 April 2024 to 31 March 2025. ...
How does tax work for New Zealand sole traders?: As a New Zealand sole trader, you pay income tax on your net profit — that is, your total business income minus all allowable business expenses. You r...
What are the New Zealand income tax rates for 2024/25?: New Zealand's 2024/25 income tax rates for individuals (including sole traders) are: | Income Range | Tax Rate | |---|---| | NZ$0 – NZ$14,000 | 10.5% ...
What is the ACC Earners' Levy and how much do sole traders pay?: The ACC Earners' Levy funds New Zealand's Accident Compensation Corporation (ACC) scheme, which provides no-fault cover for accidental injuries for al...
When do NZ sole traders need to register for GST?: You must register for GST in New Zealand if your annual taxable supplies (turnover) exceed NZ$60,000 in any 12-month period, or if you expect them to ...
How does GST work for New Zealand sole traders?: GST (Goods and Services Tax) is a 15% tax charged on most goods and services supplied in New Zealand. As a GST-registered sole trader, you act as a co...
How often do NZ sole traders need to file GST returns?: New Zealand GST returns can be filed monthly, bi-monthly (every 2 months), or 6-monthly, depending on your turnover: **Monthly:** For businesses with ...
What is provisional tax and who has to pay it in New Zealand?: Provisional tax is how New Zealand sole traders pay income tax in advance throughout the year rather than in one lump sum after filing their IR3. It h...
When are the provisional tax payment dates in New Zealand?: New Zealand provisional tax for the 2025/26 tax year (1 April 2025 – 31 March 2026) is due in three instalments: 1. **28 August 2025** — First instalm...
When is the IR3 tax return deadline in New Zealand?: If you file your own IR3 (without using a tax agent), the standard deadline is **7 July** following the end of the tax year. For example, your 2024/25...
What business expenses can New Zealand sole traders claim?: New Zealand sole traders can deduct any expense that is incurred in the course of earning taxable income, provided it is not private in nature. The ke...
How do NZ sole traders claim home office expenses?: New Zealand sole traders who work from home can claim a proportion of their home running costs as a business expense. There are two methods: **Method ...
How do NZ sole traders claim vehicle expenses?: New Zealand sole traders can claim vehicle expenses using one of two methods: **Method 1 — Kilometre Rate (simplest):** For 2024/25, the IR kilometre ...
What is the NZ low-value asset threshold for immediate write-off?: New Zealand has a low-value asset threshold that allows you to immediately deduct the full cost of qualifying business assets in the year of purchase,...
How long do NZ sole traders need to keep their records?: New Zealand sole traders are required to keep all business records for a minimum of **7 years** from the end of the tax year in which the transaction ...
What is an IRD number and do I need one as a NZ sole trader?: An IRD number is a unique 8 or 9-digit number that identifies you to Inland Revenue. Everyone who earns income in New Zealand needs an IRD number — it...
What is myIR and how do sole traders use it?: myIR is Inland Revenue's secure online portal at myir.ird.govt.nz. It is the main way New Zealand sole traders manage their tax affairs online. Throug...
How does a NZ sole trader file their IR3 tax return?: As a New Zealand sole trader, you file your annual income tax return using the IR3 form. The most common method is filing online through myIR. **Steps...
What are the penalties for late filing or paying tax in New Zealand?: Inland Revenue charges penalties for both late filing and late payment of tax in New Zealand: **Late Filing Penalties:** - NZ$100 penalty immediately ...
What is use-of-money interest and when does it apply in NZ?: Use-of-money interest (UOMI) is interest charged by Inland Revenue when you underpay your tax obligations. It is calculated from the day your payment ...