Tax, GST, provisional tax, ACC and invoicing for the newly self-employed

What to do first

1. Tell Inland Revenue you're a sole trader (myIR message). Get an IRD number if you don't have one.
2. Open a business bank account.
3. Decide how you'll track income and expenses (a simple spreadsheet works, or accounting software). Keep records for seven years.
4. If you're paid as a contractor, ask whether tax will be withheld (schedular payments) and give the payer your IR330C.
5. Set aside a percentage of every payment in a separate account for tax and ACC. Ask an accountant what percentage suits your income.

GST

You must register for GST if you carry out a taxable activity and your turnover was at least $60,000 in the last 12 months, or you expect it to be at least $60,000 in the next 12 months. You also must register if you add GST to your prices. Starting a business doesn't automatically mean registering. When you register you choose how often to file and how to account for GST. If you've been adding GST to prices before registering, contact Inland Revenue about backdating.

Invoicing basics

• Include your name or trading name, the date, a description of what you supplied, the amount, and payment details (bank account, due date).
• If you're GST-registered, include your GST number and the GST amount. For bigger invoices, the buyer's details are also expected. Check Inland Revenue's GST guide for current invoice requirements.
• Put payment terms on every invoice (for example, 14 days) and chase late payments early.

Provisional tax

If your residual income tax (RIT) for last year was $5,000 or less, you don't pay provisional tax and pay your tax in a lump sum after the year ends. If it was more than $5,000, you generally pay provisional tax during the year. Under the standard option each instalment is based on last year's RIT plus 5% (or RIT from two years ago plus 10%, depending on when you file last year's return and whether you have an extension). Usually three instalments, or two if you're registered for GST and file six-monthly returns.

ACC levies

• You're automatically covered by ACC CoverPlus. The levy is based on your type of work and your liable earnings, which come from your tax return (net schedular payments, partnership income, and self-employment income, minus expenses).
• For 2026/27, ACC's guidance gives standard CoverPlus liable earnings between $50,501 and $156,641. Check how your first-year levy will be worked out with ACC.
• CoverPlus Extra lets you choose your own cover amount, between $40,401 and $125,313 in 2026/27 (ACC). It is for self-employed people or non-PAYE shareholders who file ACC liable income; part-time workers qualify if their earnings are above the CPX minimum.
• Your first levy invoice arrives after your first year in business. Check the rates for your industry in the ACC levy guidebook or calculator.

Working from home

If you have a dedicated room or area used mainly for the business, you can claim a share of home costs. Inland Revenue's square metre method gives a rate per square metre for running costs (power, insurance and similar). Inland Revenue's rate is $57.30 per square metre for the 2026 income year (1 April 2025 to 31 March 2026); the rate is reset each year, so check ird.govt.nz for the current one. Premises costs such as rent, rates and mortgage interest are apportioned separately. Working at the dining table does not usually count. Keep a floor plan and photos.

• Set up: reliable internet, a decent chair and desk, a laptop that's backed up, a separate phone number or email, and a tidy area that you can close the door on.
• Keep receipts for things bought for the business, including part-business-use items (apportion).
• Working from home can also mean you'll need business or contents insurance. Check your home and contents policy covers business equipment.