The $60,000 GST Threshold Guide
Crossing the line mid-year? Our expert guide analyzes mandatory registration rules, strategic timing, and how to protect your cashflow.
The 10-Second Rule
GST registration is mandatory if your total sales exceed $60,000 in any rolling 12-month period. It is NOT based on the financial year; you must check your last 12 months at the end of every single month.
The Two Mandatory Tests
1. The Backward Look
Look at your history.
2. The Forward Look
Predict your future.
The "Magic Number" Explained
In New Zealand, $60,000 is the critical threshold for Goods and Services Tax (GST). If your business turnover—your total sales before expenses—hits this mark, you are legally required to join the GST system.
Whether you are a sole trader, a company, or a partnership, the rules are identical. Failing to register within 21 days of crossing the threshold can lead to significant back-dated tax bills.
Should You Register Voluntarily?
- ✅ Claim Refunds: Get 15% back on startup costs (laptops, vehicles, tools).
- ✅ B2B Power: Business clients don't care about GST; they just claim it back.
- ✅ Growth Ready: No "price shock" for customers later on.
- ❌ B2C Pricing: You stay 15% cheaper for everyday consumers.
- ❌ Admin Load: No two-monthly GST filings to worry about.
- ❌ Mental Bandwidth: Focus purely on sales in your first year.
Turnover Tiers & Actions
| Turnover Level | Status | Recommended Action |
|---|---|---|
| $0 – $30,000 | Voluntary | Wait unless high setup costs |
| $30,000 – $59,999 | Voluntary | Register if B2B; monitor closely |
| $60,000+ | MANDATORY | Register within 21 Days |
The Danger Zone: Late Registration
If the IRD finds you should have been registered six months ago, they will backdate your registration and demand 15% GST on **all** past sales immediately—even if you never collected it from your customers. This is the fastest way to bankrupt a small business.
Frequently Asked Questions
No. The $60k threshold applies to your gross turnover (total income before any expenses). Once you are registered, you then add 15% on top of your prices.
Zero-rated supplies (like exports) still count towards the $60,000 threshold. You must register even if you end up charging 0% GST to everyone.
Yes. If you believe your turnover for the next 12 months will be reliably under $60,000, you can apply to cancel your registration via myIR.
More NZ GST & Tax Tools
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