GST is one of the first tax questions every new tradie faces. At what point do you have to register? What happens when you do? Can you register early? And what does it actually mean for your invoicing and pricing?
This guide answers all of those questions with the specifics that matter for trade work in New Zealand.
The $60,000 Threshold — When You Must Register
You are legally required to register for GST if your total taxable turnover (income from your trade work) exceeds $60,000 in any 12-month period, or if you expect it to in the next 12 months.
The $60,000 includes your gross invoiced amounts — not your net profit. So if you invoice $65,000 and spend $30,000 on materials and fuel, your turnover is still $65,000 and you must register.
What counts toward the threshold: - Labour charges - Materials you supply to the job - Call-out fees and travel charges
What doesn't count: - Income from selling a personal asset (your own car, house) - Wages from employment (only if you also have self-employed income) - Exempt supplies (rare in trade work)
Once you cross the threshold, you must register within 21 days.
Voluntary Registration — Should You Register Early?
You can voluntarily register for GST even if your turnover is below $60,000. For many tradies, this is worth doing from day one.
Why Voluntary Registration Makes Sense
You can claim GST back on business purchases: - Tools and equipment (15% GST back on every tool you buy) - Materials and supplies - Your work vehicle running costs - Phone, accounting software, advertising
If you're buying a $20,000 ute for work, that's $2,608 in GST you can claim back immediately.
Customers who are GST-registered expect it: Building contractors, property developers, and other businesses are themselves GST-registered. When you charge them, they can claim the GST back — so your pricing is effectively cheaper for them than a non-registered competitor quoting the same amount exclusive of GST.
When Voluntary Registration Isn't Worth It
You mainly work for private homeowners. Private individuals can't claim GST back, so adding 15% to your prices genuinely makes you more expensive. If you're below the threshold and your work is mostly domestic, staying unregistered keeps your prices lower.
Your turnover is very low. GST filing adds an ongoing compliance obligation (returns every 1–2 months). If you're only doing a few jobs a year, the administrative burden may outweigh the GST refunds.
Rule of thumb: If your material/equipment spend is significant or you work with business clients, register. If you're doing small domestic jobs with low material costs, wait until you need to.
How to Register for GST
Registration is done through IRD's myIR portal. You'll need:
- Your IRD number
- Your business start date
- Your expected turnover
- Your GST return filing frequency preference (monthly, 2-monthly, or 6-monthly)
- Your bank account details (for refunds)
Go to: ird.govt.nz — Register for GST
Registration takes effect from the date you choose (usually the date you applied or a future date). You can't back-date GST registration to claim GST on purchases made before your registration date.
What Changes When You Register
1. You Must Charge GST on All Sales
Once registered, you must add 15% GST to every invoice. If you quoted $1,000 for a job before registering and now you're registered, you need to charge $1,150 (or absorb the $150 yourself).
Practical tip: Update your invoice template immediately. Make sure it shows: - Your GST number (found on your myIR dashboard after registration) - The GST-exclusive amount - The GST amount (15%) - The GST-inclusive total
Download our free GST invoice templates — they include all required fields.
2. You Can Claim GST on Business Expenses
You can now claim back the GST component of your business purchases — fuel, tools, materials, subcontractor invoices (if they're GST-registered), phone, accounting fees.
Keep receipts. IRD accepts digital scans, so use a phone app or a folder in your email.
3. You Must File GST Returns
GST returns are filed on a regular schedule and you must pay (or receive a refund of) the net GST:
Net GST = GST collected from customers − GST paid on business expenses
If you collected $2,500 in GST from customers and paid $1,200 in GST on expenses, you remit $1,300 to IRD.
If you paid more GST on expenses than you collected (common if you've just bought a vehicle or large equipment), IRD refunds the difference.
4. Filing Frequencies
| Frequency | Available When | Return Due |
|---|---|---|
| Monthly | Any turnover | 28th of following month |
| 2-monthly | Most tradies | 28th after end of period |
| 6-monthly | Turnover under $500K | Twice a year |
Most tradies use 2-monthly filing — it balances simplicity with not having too much GST build up. Use our GST calculator to keep track of what you owe each period.
Pricing Your Work After GST Registration
This is the part that trips up a lot of new registrants.
Option 1: Add GST on Top of Your Existing Prices
You keep quoting the same net amount and simply add 15% on top for GST-registered customers.
Example: You used to quote $2,000 for a bathroom job. Now you quote $2,000 + GST = $2,300.
Works well when: your customers are businesses who can claim the GST back.
Option 2: Keep Your All-Inclusive Price the Same
You absorb the GST within your existing price. That $2,000 job now means you keep $1,739 and remit $261 to IRD.
The problem: you've effectively given yourself a pay cut.
The Right Approach
Review your hourly rate and ensure it accounts for the fact that you now need to collect and remit GST as a business. Your rate should be based on what you want to take home — build backwards from there, including tax, ACC, and overhead.
GST on Materials
If you buy materials for a job (tiles, pipe fittings, wire) and supply them to the customer, you charge GST on both the labour and the materials.
Example: - Labour: $800 + GST = $920 - Materials (tiles): $600 + GST = $690 - Total invoice: $1,610 inc. GST
You also claim back the GST you paid when you bought the tiles ($78.26), so your net GST position on materials is roughly neutral.
Common GST Mistakes Tradies Make
| Mistake | Impact |
|---|---|
| Not tracking GST separately | IRD shortfall + penalties |
| Forgetting to claim input tax | Overpaying GST |
| Late or missing GST returns | Late filing penalties and interest |
| No GST number on invoices | Non-compliant invoices; disputes with clients |
| Spending the GST before paying IRD | Cash flow crisis at return time |
Tip on that last one: open a separate bank account just for GST. Every time you receive a payment, transfer 13.04% (which is the GST portion of a GST-inclusive payment) to that account. Never touch it except to pay IRD.
Cancelling GST Registration
If your turnover drops below $60,000 and stays there, you can cancel your GST registration. There may be a final GST return to file and potentially a clawback on assets you claimed GST on (like a vehicle).
Cancellation is done through myIR. Don't cancel just because a single period was quiet — IRD looks at 12-month rolling turnover.
Key IRD Links
- Register for GST
- GST returns and payment
- Tax invoices — what must be included
- Claiming GST on business expenses
Free Tools
- GST Calculator — add or remove GST from any amount
- Invoice Templates — free, IRD-compliant invoice and quote templates with GST fields
- Hourly Rate Calculator — set a rate that accounts for GST, tax, and overhead
- Markup / Margin Calculator — price materials correctly
Related Articles
- NZ Tradie Tax Guide 2026 — Complete Overview
- EOFY Checklist for NZ Tradies 2026
- How to Set Your Hourly Rate as a Tradie
NZ Tradie Tools provides free calculators, templates and guides for New Zealand tradies. This article is general information — for advice specific to your situation, consult a registered tax agent or IRD directly.