NZ Tradie FAQ (2026)

You must register for GST when your turnover exceeds $60,000 in any rolling 12-month period — not the financial year. You can also register voluntarily. Once registered, add 15% GST to all invoices and file GST returns with IRD. Full guide → | GST Calculator →

Provisional tax is pre-payment of your expected income tax. It kicks in if your residual income tax (RIT) from the previous year exceeded $5,000. Standard payment dates: 28 August, 15 January, 7 May. Set aside 25–30% of every payment from day one. Full guide → | Provisional Tax Calculator →

Common deductible expenses:

• Tools and equipment (under $1,000 — claim in full; over $1,000 — depreciate)
• Vehicle expenses (logbook required for mixed-use vehicles)
• Fuel, oil, and maintenance for work vehicles
• Work clothing (safety boots, hi-vis, branded workwear)
• Phone and internet (business-use portion)
• Training, licences, and professional memberships
• ACC levies, insurance premiums, and accounting fees
• Home office costs (if used genuinely for business admin)

Full deductions guide →

If GST-registered, add 15% to your pre-GST subtotal. Example: $1,000 + $150 GST = $1,150 total. Your tax invoice must show your GST number, the GST amount, and the total including GST. GST Calculator → | Free Tax Invoice →

Most tradies start as sole traders and it works well at lower incomes. The company tax rate (28%) becomes attractive when you're earning roughly $90,000+ in net self-employment profit. A company also provides limited liability protection but involves more compliance and accounting costs. Full guide →

2024–25 NZ personal income tax rates:

• 10.5% on income up to $14,000
• 17.5% on $14,001–$48,000
• 30% on $48,001–$70,000
• 33% on $70,001–$180,000
• 39% on income over $180,000

Plus ACC earners' levy ($1.39/$100) on top. PAYE Calculator →

For 2024–25: Tier 1 — 73 cents/km for the first 14,000 business km. Tier 2 — 21 cents/km above 14,000 km. These rates apply to petrol and diesel vehicles. Electric vehicles use a different rate. Mileage Calculator →

Most small businesses file GST every 2 months (bi-monthly). Businesses with turnover under $500,000 can apply for 6-monthly filing. Larger businesses (over $24M) file monthly. You can choose to file monthly even below the threshold — useful if you have regular refunds from large material purchases.

Yes, under the second-hand goods input tax credit rules, GST-registered buyers can claim input tax on second-hand goods purchased from non-registered sellers in NZ, provided the purchase is for your taxable activity and you keep a record of the purchase (name, date, price, and description of goods). The claim is calculated as 3/23 of the purchase price.

The flat company income tax rate in NZ is 28%. This applies to net taxable profit of an incorporated company. When you draw money from the company as a salary or dividend, further personal income tax may apply. Dividends carry imputation credits that can offset personal tax on the dividend.

A tax agent (accountant or tax adviser) files returns on your behalf and may extend your due dates. For self-employed tradies with any complexity (vehicles, depreciation, subcontractors), a good accountant typically saves more than they cost in tax optimisation. Look for one experienced with trade businesses.

Three levies:

1. Work levy — based on your trade classification. Roofers pay higher rates than electricians.
2. Earner levy — 1.39% of liable income (capped at ~$142,000 for 2024–25). Covers non-work injuries.
3. Working Safer levy — 0.08%. Funds WorkSafe NZ.

ACC only covers accidents, not illness. Use our ACC Levy Calculator →

Not legally required, but essential. Most principal contractors and commercial clients require at least $1M–$2M public liability cover before you start on site. Without it, you're personally liable for third-party property damage or injury. Costs $400–$1,200/year. Guide →

No. ACC only covers injuries caused by accidents. Illness, gradual-onset conditions (back problems from heavy work over time), mental health issues, and chronic conditions are not covered. You need income protection insurance for illness cover. Guide →

Yes. CoverPlus Extra lets self-employed people set a fixed agreed level of cover (not tied to last year's income), useful if your income varies year to year. You pay levies on the agreed amount. It guarantees that amount of weekly compensation without IRD income verification — a significant advantage in your first year or after a low-income year.

Tradie tool insurance typically covers loss or damage to tools, plant, and equipment caused by theft, accidental damage, and fire. Coverage can include tools in a locked vehicle, on-site, or in transit. Most policies cover replacement cost rather than market value. Check excesses and exclusions for unattended vehicles.

Under standard CoverPlus, ACC pays 80% of your prior year earnings (as declared to IRD) if you are unable to work due to an injury. The first week is not compensated. If your income varies significantly year to year, CoverPlus Extra at a fixed agreed amount is often better.

Professional indemnity insurance covers claims arising from professional advice or errors in your work. It is most relevant for trade businesses that provide design advice, specifications, or consulting — such as engineers, architects, or surveyors. Standard tradies doing hands-on work are more exposed through public liability and contract works policies.

Verbal contracts are legally valid but almost impossible to enforce in disputes. For any job above a few hundred dollars, have written agreement on scope, price, payment terms, and variations. The Construction Contracts Act 2002 applies automatically — knowing it protects you. Guide → | Free quote template →

Step through these in order:

1. Friendly reminder with payment link
2. Formal demand letter (holds legal weight)
3. Disputes Register listing (public, $38, deters non-payers)
4. Disputes Tribunal — free, handles up to $30,000, binding decisions
5. CCA adjudication — fast-track for construction payment disputes

Full guide →

A variation order is written confirmation of any change to the original scope, price, or timeline. Without it, you have no proof the client agreed to extra work. Issue one for every change — even small ones. Download our free Variation Order template →

Retention is a percentage (typically 5–10%) withheld from each payment as security that you'll fix defects. Released at practical completion and at the end of the defects liability period (usually 12 months). Under the CCA 2002, retention money must be held in trust. Retentions Calculator →

A quote is a fixed offer — if accepted, you must complete the work at that price (unless agreed variations arise). An estimate is an approximation and is not binding. Courts and the CCA treat them differently. Clients prefer quotes; use estimates only when scope genuinely cannot be determined upfront.

A valid NZ tax invoice must include:

• The words "Tax Invoice" prominently displayed
• Your name and GST registration number
• Date of invoice
• Description of goods or services supplied
• GST-exclusive price, GST amount, and GST-inclusive total
• Client's name and address (for invoices over $1,000)

Free Tax Invoice Template →

Under the Construction Contracts Act, a payment claim must be responded to within 20 working days (or the period stated in the contract). If no response, the full claimed amount becomes due. For other contracts, 30 days is standard business practice. Your terms of trade should clearly state your payment period.

Yes, if your terms of trade state a late payment interest rate. Without it in writing, you can still claim interest under the Judicature Act at the court prescribed rate (currently 5% per year). Include an overdue interest clause in your standard terms — e.g., "Interest of 2% per month on amounts overdue by more than 30 days."

NZ doesn't have a direct equivalent to construction liens, but the CCA 2002 gives strong payment claim rights for construction contracts. Additionally, the Property Law Act 2007 allows a "retaining lien" over goods still in your possession (like materials not yet installed). Completed work on someone else's property cannot be claimed under lien — use CCA adjudication instead.

CCA adjudication is a fast-track payment dispute resolution process under the Construction Contracts Act 2002. Either party can apply to a nominating body (e.g., AMINZ) for an adjudicator. The adjudicator makes a binding decision usually within 30–35 working days. Costs are typically shared but can be awarded against the losing party. It is faster and cheaper than court for construction payment disputes.

An LBP (Licensed Building Practitioner) licence is required to carry out or supervise Restricted Building Work (RBW) — structural work, weathertightness, foundations, external cladding, and design on homes and small buildings. Doing RBW without an LBP is an offence under the Building Act 2004. Check: lbp.govt.nz

Most structural work, new buildings, additions, plumbing, drainage, and deck/pool work requires consent. Some minor work is exempt (painting, like-for-like replacements, small sheds under 10 m²). Even exempt work must comply with the Building Code. Check with the local council. Consent Fee Calculator →

A SWMS (Safe Work Method Statement) identifies hazardous tasks, risks, and control measures. Required for high-risk construction work under HSWA. Principal contractors often require it from all subcontractors. Download our free SWMS template →

Yes. Plumbing and gasfitting work must be carried out by or under the supervision of a licensed craftsperson or certifying plumber/gasfitter, registered under the Plumbers, Gasfitters, and Drainlayers Act 2006. All work must be inspected and signed off. Check: pgdb.co.nz

Yes. All electrical work must be done by or under the supervision of a Licensed Electrical Worker (LEW) registered with Electrical Workers Registration Board (EWRB). Inspection, testing, and issuing of an Electrical Safety Certificate (ESC) are also required. Check: ewrb.govt.nz

A Code Compliance Certificate (CCC) confirms that consented building work was completed in accordance with approved plans and the Building Code. The local council issues it after inspections. Without a CCC, building work is not legally complete. Missing CCCs can prevent property sales and trigger fines.

IRD requires you to keep business records for 7 years. This includes: all invoices (issued and received), bank statements, expense receipts, vehicle logbook, asset register, and GST returns. Digital records are acceptable. Cloud accounting software like Xero or MYOB make this easier to manage.

Every NZ business entity (including sole traders) can obtain a unique 13-digit New Zealand Business Number (NZBN) from the Companies Office. It is optional but increasingly required by large clients and government agencies. It links to your business details in a national register. Register free at nzbn.govt.nz.

Your rate must cover: take-home pay target + income tax + ACC + vehicle + tools + insurance + slow periods + public holidays. Many tradies undercharge by only thinking about take-home. Use our Hourly Rate Calculator → to build a rate that accounts for all costs.

Fixed price suits well-defined jobs (new builds, renovations with clear scope). Time and materials suits less-defined work (repairs, maintenance, investigation work). Hybrid approaches work well — quote materials as provisional sums and labour as time and materials. Always include a variation clause. Pricing guide →

A common benchmark is 20–30% markup on materials (17–23% margin). This covers admin, procurement time, warranty risk, and waste. Some trades mark specialty or hard-to-source materials higher. Consumables (sandpaper, tape, drill bits) are often bundled into the hourly rate. Markup vs Margin Calculator →

Target a gross margin (revenue minus direct job costs) of 35–55%. Net profit after overheads should be 15–25%+. Margins below 30% leave little buffer for cost overruns, slow work, or bad debts. Use our Job Cost Calculator → to build each quote from cost up.

A sole tradie working 46 weeks (52 minus 4 weeks leave and 2 weeks public holidays) × 8 hours = 1,840 potential hours. After travel, quoting, admin, tool maintenance, and quiet periods, realistic billable hours are 1,200–1,500/year. This is the number to use when calculating your hourly rate target.

Hire when you're consistently turning away work, when your hourly rate to clients exceeds your labour cost, and when your cash flow can sustain a payroll 3–4 weeks in advance. Calculate the true employment cost first — it's typically 115–125% of the base wage after KiwiSaver, ACC, and leave entitlements. True Cost Calculator →

Markup is profit as a percentage of cost. Margin is profit as a percentage of price. A 50% markup on $100 cost = $150 price. A 50% margin on $150 price = $75 profit. These are very different numbers. Confusing them is one of the most common pricing errors in trade businesses. Calculator →

No distinction is needed on a GST invoice — GST applies to the total charge including both labour and materials. You charge 15% GST on your total invoice amount and claim GST back on materials you purchase. The components shown on the invoice are for the client's clarity, not for GST calculation.

From 1 April 2025, the adult minimum wage is $23.15/hr. The starting-out and training minimum wage is $18.52/hr (for eligible workers in their first 200 hours or 3 months). PAYE Calculator →

All NZ employees are entitled to 4 weeks' annual leave per year after 12 months of continuous employment. The entitlement resets after each 12 months. Employees are also entitled to public holidays, sick leave, and bereavement leave under the Holidays Act 2003. Leave Calculator →

Employees get 10 sick days per year after 6 months of employment, with up to 20 days able to be carried over. The maximum sick leave balance is 20 days at any time. Sick leave can also be used to care for a sick spouse, partner, or dependent child.

Yes. Employers must contribute a minimum of 3% of an employee's gross wages to KiwiSaver (ESCT deducted). This is paid on top of the wage — it's an additional cost to the employer, not a deduction from the employee's pay. KiwiSaver Cost Calculator →

The Employment Relations Act 2000 uses a "real nature of the relationship" test. Key factors: does the person work for multiple clients, set their own hours, use their own tools, advertise their business, and bear financial risk? If someone works exclusively for you under your direction and schedule, they may legally be an employee regardless of what the contract says. Getting this wrong means back PAYE, KiwiSaver, ACC, and penalties. Calculator →

Notice periods are set by the employment agreement, not statute — there is no statutory minimum notice period for personal grievance reasons. However, the agreement typically states 2–4 weeks' notice for both parties. For serious misconduct, you can dismiss without notice. Always follow a fair process under the Employment Relations Act before any dismissal.

Apprentice pay is negotiated between employer and apprentice but must meet the applicable minimum wage. Industry progression guides (e.g., BCITO rates) suggest 50–65% of qualified rate in Year 1, rising to 80–90% by Year 3–4. Apprentices must also be enrolled in an industry training programme (ITO). Apprentice Wage Calculator →

Yes, but only for genuine business reasons (genuine restructure, downturn in work, position eliminated). You must follow a fair process: consult the employee before the decision is made, consider redeployment options, and give proper notice and any agreed redundancy compensation. Sham redundancy (replacing role immediately with the same work) is unlawful.

A PCBU (Person Conducting a Business or Undertaking) is anyone running a business — including sole trader tradies. Under HSWA 2015, as a PCBU you must manage health and safety risks for workers, eliminate or minimise risks so far as is reasonably practicable, and consult with workers about H&S decisions. Failure can result in fines up to $300,000 (or $600,000 for companies).

WorkSafe requires fall protection (scaffolding, edge protection, or safety harness) for work at heights above 1.5 m on construction sites. For work on residential roofs at 3 m+, edge protection is generally required at the eave line. The Approved Code of Practice for Scaffolding and ASCC scaffolding standards provide detailed requirements. Scaffolding Hire Calculator →

A notifiable event is a death, notifiable injury/illness, or notifiable incident. If one occurs, you must preserve the scene (except for safety/recovery), notify WorkSafe as soon as possible, and keep records. Notifiable injuries include fractures, amputations, serious burns, and injuries requiring hospitalization for more than 48 hours.

Asbestos was commonly used in NZ buildings built before 1990 (roof cladding, floor tiles, insulation, textured ceilings). If you disturb or may disturb asbestos during work, you must assess and manage the risk. Class A removal (friable asbestos) requires a licensed removalist. Class B removal (non-friable, less than 10 m²) can be done by licensed or supervised workers. Check the WorkSafe Asbestos guidance at worksafe.govt.nz.

A Site Safety Plan (SSP) is required for notifiable construction work (work involving risks of serious harm, lasting more than 30 days or involving more than 100 person-days). The principal contractor must prepare and manage it. Subcontractors contribute to and must comply with the SSP. For smaller residential jobs, a SWMS document covers most H&S requirements.

Minimum PPE requirements vary by task and site rules, but typically include:

• Hard hat (AS/NZS 1801)
• Hi-vis vest or jacket (Class 2 minimum on roads)
• Safety boots (AS/NZS 2210.3)
• Safety glasses for power tool use
• Hearing protection for sustained noise above 85 dB(A)
• Gloves, respiratory protection, and fall harness as task requires

Under HSWA, all PCBUs on a shared worksite must consult, cooperate, and coordinate with each other on H&S matters. The principal contractor has primary responsibility for the worksite itself. Each PCBU retains responsibility for the safety of their own workers. "It's their site, not my problem" is not a valid defence under HSWA.

Yes. Tools costing $1,000 or less (excluding GST) can be written off immediately as a low-value asset. Tools over $1,000 must be depreciated using IRD rates. Power tools are typically depreciated at 20% DV or 13.5% SL per year. Keep receipts for all tool purchases. Depreciation Calculator →

Yes, but you can only claim the business-use proportion as a deduction. If a tool is used 80% for work and 20% personally, claim 80% of the cost or depreciation. Dual-use is fine but document your usage if the business vs personal split is likely to be queried by IRD.

Finance preserves cash flow and keeps capital working in the business. If the equipment generates more than its finance cost, borrowing makes sense. You can claim the interest portion of repayments as a tax deduction plus depreciation on the asset. If cash flow is strong and finance rates are high, outright purchase eliminates ongoing interest cost. Finance Calculator →

The most popular utes for NZ tradies in 2025 are the Toyota HiLux, Ford Ranger, and Mitsubishi Triton. Payload, towing capacity, fuel efficiency, and parts availability are key factors. NZ residual values on Toyota and Ford utes remain strong. Diesel is still dominant for load-carrying and towing, though hybrid models are emerging.

The IRD depreciation rate for a light commercial vehicle (ute) is 30% diminishing value (DV) or 21% straight-line (SL). A $40,000 ute depreciates by $12,000 DV in year 1, $8,400 in year 2. You can only depreciate the business-use proportion if the ute is also used privately. Depreciation Calculator →