NZ Tax Hub Blog

Are You Self-Employed?

If you drive for Uber, Uber Eats, Zoomy, or any gig platform in New Zealand, you are classified as self-employed by IRD — not an employee. This means you are responsible for paying your own income tax and managing your GST obligations.

Do You Need to Register for GST?

If your gross earnings from all gig work exceed $60,000 in any 12-month period, you must register for GST. Many drivers reach this threshold quickly when combining Uber with food delivery or other gig work. Failing to register on time results in penalties and back-dated GST obligations.

What Can You Claim as Deductions?

• Vehicle expenses — fuel, WOF, registration, insurance, repairs and maintenance (vehicle logbook required)
• Phone costs — the business-use portion of your mobile phone and data plan
• App fees — Uber's service fee (commission) is a deductible expense
• Supplies — water, bags, phone mounts, chargers used for work
• Accounting fees — our fees for preparing your tax return are deductible!

How to Calculate Your Vehicle Claim

You can use either the kilometre rate method (IRD publishes annual rates per km) or the actual cost method (requires a logbook for 90 days to establish business-use percentage). We can advise which is better for your situation.

Filing Your Return

You must file an IR3 individual tax return each year by 7 July (or 31 March if you use a tax agent like us, which often grants extensions). We strongly recommend using a registered tax agent to ensure accuracy and maximise your refund.

Your Employment Status

Grocery delivery drivers working for apps or directly for supermarkets are generally treated as self-employed contractors by IRD. This means you file your own tax return and are not covered by PAYE.

GST Threshold — Act Fast

If your total self-employed income from grocery delivery (and any other gig work) exceeds $60,000 in 12 months, GST registration is mandatory. Register proactively — IRD can back-date your registration and bill you GST you didn't collect from clients.

Claimable Expenses

• Vehicle running costs — fuel, tyres, servicing, insurance (business-use portion)
• Insulated delivery bags and equipment
• Phone and data plan (work-use portion)
• Platform fees and commissions charged by the app
• Parking fees incurred during deliveries
• Tax agent and accounting fees

Keeping Good Records

IRD requires you to keep records for 7 years. Keep all income statements from the platform, receipts for expenses, and a vehicle logbook. Many drivers use simple apps or spreadsheets — we can provide templates.

Provisional Tax Warning

If your residual income tax (RIT) exceeds $5,000 after your first year of filing, you will be required to pay provisional tax in instalments throughout the following year. We help clients plan for this so there are no surprises.

The Most Missed Deductions

Construction businesses in NZ often leave significant money on the table at tax time. Here are the deductions our clients most commonly miss:

• Tools and equipment — items under $1,000 can be fully expensed; larger items are depreciated
• Work clothing — branded workwear, safety gear, hi-vis, steel-capped boots
• Vehicle costs — utes, vans and trailers used for work (logbook required)
• Subcontractor payments — fully deductible, but withholding tax (WT) may apply
• Site costs — skip bins, temporary fencing, portable toilets
• Training and licensing — building trade training, LBP renewal fees
• Home office — if you run admin from home, a portion of rent/mortgage interest and power is claimable

LBP and Contractor Registrations

Annual fees for Licensed Building Practitioner (LBP) registration, trade memberships like Masterbuilders or Certified Builders, and liability insurance premiums are all fully deductible business expenses.

GST on Construction Contracts

Progress payments, retentions, and contract variations all have specific GST timing rules. Getting this wrong can lead to over-filing or under-filing. We ensure your GST returns accurately reflect the nature of your contracts.

Business Structure Review

Many sole-trader builders are paying more tax than necessary. Operating as a company can reduce your effective tax rate significantly at certain income levels. We provide free structure advice as part of our onboarding.

Interest Deductibility — What Changed

From 1 April 2024, interest on residential rental property loans became fully deductible again for most landlords. This is a major change from the previous phased-out rules and means more landlords can now reduce their taxable rental income significantly.

The Bright-Line Test in 2026

The bright-line test taxes profits on property sold within 2 years of purchase (as of July 2024 legislation). Properties acquired before this date may still be subject to the previous 5 or 10-year rules depending on when they were purchased. We can advise on your specific situation.

What You Can Deduct

• Mortgage interest (now fully deductible for most residential rentals)
• Property management fees
• Rates and insurance
• Repairs and maintenance (not improvements)
• Advertising for tenants
• Accountant and legal fees
• Depreciation on chattels (carpets, appliances, curtains)

Airbnb and Short-Term Rentals

Short-stay rentals (Airbnb, Bookabach, etc.) are subject to different rules — particularly if the property is also personally used. Mixed-use asset rules apply and expenses must be apportioned correctly. GST may also apply if income exceeds $60,000.

Livestock Valuation Methods

NZ farmers must choose a valuation method for livestock: the herd scheme (livestock valued at annually published national average values) or national standard cost (values based on standard rearing costs). The choice has significant long-term tax implications and is not easily reversed.

Key Farm Tax Deductions

• Fertiliser, seed, spraying and cropping costs
• Farm vehicle and machinery running costs
• Veterinary and animal health expenses
• Farm insurance and rates
• Sharemilker and labour costs
• Irrigation systems and drainage (may be capital or revenue depending on nature)
• Repairs to farm buildings and fences

GST on Farming

Most farm income and expenses are zero-rated for GST purposes. However, transactions involving sale of land, private-use portions, and some government subsidies have specific GST treatment. Getting the zero-rating wrong is a common IRD audit trigger for farmers.

Seasonal Income Averaging

Farming income can vary dramatically year to year. We use income equalisation deposits and withdrawal strategies to smooth your taxable income across years and reduce overall tax paid over time.

Choosing the Right Business Structure

Most restaurant owners start as sole traders but quickly outgrow this structure. Incorporating as a company (28% flat tax rate) instead of paying personal rates (up to 39%) can save thousands annually once your profit exceeds certain thresholds.

What Can Restaurants Claim?

• Food and beverage cost of goods sold (COGS)
• Staff wages, PAYE and KiwiSaver contributions
• Rent and utilities for the premises
• Equipment purchases and depreciation (ovens, fridges, POS systems)
• Uniforms and staff clothing with your branding
• Marketing, website, social media advertising costs
• Cleaning supplies and hygiene products
• Accountant, legal and licensing fees

GST for Hospitality

All restaurant and bar sales attract GST at 15%. Tips received are also subject to GST if processed through your system. Staff meals (below a threshold) may be GST-exempt. We help you maximise input credits for all your business purchases.

FBT — Don't Forget Staff Meals

Providing free or subsidised meals to employees may trigger Fringe Benefit Tax obligations. There are exemptions for meals provided on-site during work hours, but off-site meals and vouchers are generally subject to FBT.

GST on Accommodation Services

All accommodation in NZ is subject to GST at 15% regardless of nightly rate. This includes motels, hotels, B&Bs, and even Airbnb-style rentals. If your turnover exceeds $60,000 annually, GST registration is mandatory.

Key Deductible Expenses

• Cleaning and laundry (linen, uniforms, supplies)
• Amenities — toiletries, tea, coffee, breakfast provisions
• Staff wages, PAYE and KiwiSaver
• Insurance — property, liability, loss of earnings
• Maintenance and repairs to units and common areas
• Online travel agent (OTA) commission fees — Booking.com, Expedia, Airbnb
• Property management fees
• Marketing, website, social media
• Mortgage interest (for qualifying properties)

Residential vs Commercial Use

If any units are used for long-term residential tenancies (28+ days) rather than short-term accommodation, different GST treatment applies. The mixed-use rules must be applied carefully to avoid IRD issues.

Depreciation Claims

Buildings (commercial use), furniture, appliances, hot water systems, and carparks can all attract depreciation deductions. We prepare detailed depreciation schedules to ensure you claim the maximum entitlement each year.

Sole Trader vs Company — Which is Right for You?

Most cleaning businesses start as sole traders, which is simple but means all profit is taxed at your personal rate (up to 39%). As your business grows, operating as a limited liability company reduces your tax rate and protects your personal assets from business liabilities.

GST Registration

Once your cleaning income exceeds $60,000 in any rolling 12 months, you must register for GST. This means adding 15% to your invoices and filing GST returns with IRD. We help you register at the right time and file correctly.

Deductible Business Expenses

• Cleaning chemicals, mops, vacuums, and equipment
• Uniforms and protective clothing
• Vehicle fuel and running costs for travelling between jobs
• Public liability insurance
• Staff wages and PAYE (if you employ cleaners)
• Mobile phone and data (work-use portion)
• Business premises costs (if you have a depot)

Contractor vs Employee — Getting It Right

Many cleaning businesses use contractors to clean. IRD has strict tests to determine whether someone is genuinely a contractor or a deemed employee. Getting this wrong can result in large PAYE back-payment obligations. We advise on correct classifications.

Step 1: Get Your IRD Number

Your IRD number is essential for working, banking, and investing in New Zealand. You can apply online through the IRD website or through a tax agent. Without it, your employer must deduct tax at the no-declaration rate (45%).

The Transitional Resident Exemption

If you are a new tax resident (never been a NZ tax resident before, or absent for more than 10 years), you may qualify for the 4-year transitional resident exemption. During this period, most overseas income (interest, dividends, employment income) is exempt from NZ tax. This is a huge benefit — but it must be claimed correctly.

What Income is Taxable in NZ?

• NZ salary and wages — always taxable from day one
• NZ business income — always taxable
• Overseas income — may be exempt under transitional residency rules
• Overseas pension — specific rules apply depending on country and treaty
• Overseas investments — Foreign Investment Fund (FIF) rules may apply

Double Tax Agreements

NZ has double tax agreements (DTAs) with many countries including India, UK, Australia, USA, and more. These treaties prevent you being taxed twice on the same income. We ensure you benefit from all applicable treaty provisions.

KiwiSaver for New Residents

New employees are automatically enrolled in KiwiSaver unless they opt out within 8 weeks. Your employer contributes at least 3% on top of your salary. For migrants planning to return home, you can apply for an early withdrawal under specific conditions.