GST for lawyers and accountants NZ
Professional fees at 15%, disbursements, trust accounts, and where financial services rules differ from legal and accounting work.
This guide is for New Zealand law firms, barristers and solicitors, chartered accounting practices, bookkeepers, and tax agents who invoice clients for professional work. It covers taxable fees, disbursement pass through, trust account timing, and the line between professional services and exempt financial services. Figures are working papers for the 2026/27 year (1 April 2026 to 31 March 2027). GSTCalc.nz is not Inland Revenue (IRD). Ads may fund this free site. This is not tax advice.
Checked against IRD charging GST guidance, exempt supplies (including financial services and financial planning fees), GST guide IR375, taxable supply information rules, and the Goods and Services Tax Act 1985. Settlement GST on payouts sits in the separate legal settlements guide, not here.
| Supply | Typical GST treatment | Who remits output tax |
|---|---|---|
| Legal fees (hourly, fixed, retainer) | Taxable 15% | GST registered law firm |
| Accounting, audit, tax return, bookkeeping | Taxable 15% | GST registered practice |
| Disbursement with GST from supplier (courier, search, expert) | Pass through underlying GST | Already in third party invoice; recover on client bill |
| Court filing, many LINZ or agency fees | Usually no GST on underlying fee | Recover at cost only; do not add 15% |
| Lending, mortgages, interest, share dealing | Exempt financial services | No GST on exempt supply; limited input tax |
| Services consumed outside NZ by overseas client | Zero rated 0% if rules met | Registered firm shows 0% with evidence |
Professional fees are not financial services
Legal advice, conveyancing work, litigation, audit, annual accounts, and GST return preparation are ordinary taxable professional services at 15% once you are registered. They are not the same as exempt financial services such as lending, mortgages, or interest. Threshold and registration: $60,000 GST threshold guide and how to register for GST in NZ. Sector hub: Industry Specific GST.
Taxable at 15%
Solicitor hourly rates, barrister brief fees, conveyancing professional fees, company secretarial work, statutory audit, management accounts, payroll bureau fees, and initial financial planning or monitoring fees under IRD’s financial planning split.
Exempt or special
Bank lending, mortgage interest, penalty interest on overdue accounts, many share trades, and some financial planning implementation or administration fees. B2B financial service zero rating is a niche election: financial services B2B zero rating.
Quoting and invoicing professional fees
NZ convention is GST exclusive rates plus 15% on the invoice. A $400 per hour rate means $400 plus GST, not $400 inclusive unless the engagement letter says so. From 1 April 2023 IRD uses taxable supply information rules. You may still title documents “Tax Invoice” if the fields match. Detail: taxable supply information. Build compliant PDFs in the GST invoice generator.
3.0 hours at $380.00 exclusive = $1,140.00.
GST = $1,140.00 × 15% = $171.00.
Invoice total = $1,311.00 inclusive.
Use the free GST calculator or GST maths NZ for 3÷23 when the bank deposit is already inclusive.
The 15% of bank deposit trap
A $100 client payment that already includes GST is not $15 GST. Taking 15% of $100 gives $15, which overstates tax. Correct GST = $100 × 3 ÷ 23 = $13.04. Lawyers and accountants see this in relationship property schedules, trust reconciliations, and settlement maths. Always ask whether the figure is exclusive or inclusive first.
GST on legal disbursements
Disbursements are client costs you pay on their behalf. GST follows the underlying supply, not a blanket rule.
Courier, process server, commercial search, and GST registered expert witness fees usually carry GST you pass through. Many court filing fees and similar government charges do not. Tag each disbursement code in your practice management system so the client invoice does not add 15% on top of an already exempt payment.
Trust accounts and settlement funds
Money received into a solicitor trust account for a client is held on trust, not firm income. GST on professional work arises when you render a tax invoice and transfer fees (including GST) from trust to office. Conveyancing settlement cash that passes through trust for the property is not the firm’s taxable supply. GST applies to your professional fee for handling the matter, not to the whole settlement pool.
Overseas clients and mixed practices
Advice or compliance work consumed outside New Zealand may be zero rated when IRD’s export of services tests are met. Keep two pieces of non resident evidence. Guide: GST on services to overseas clients. A firm that also manages residential rentals has exempt rent mixed with taxable professional income. Apportion shared overheads and read exempt vs zero rated supplies.
Pull highlight: Being a lawyer or accountant does not make your fees exempt. IRD taxes professional work at 15%. Exempt status is reserved for listed supplies such as financial services and residential rent, not routine client advice.
Firm compliance checklist
- State in engagement letters whether quotes are exclusive or inclusive of GST.
- Separate professional fees, taxable disbursements, and exempt disbursements on every invoice.
- Use 3÷23 on inclusive bank receipts, not 15% of the total.
- Claim input tax on software, rent, and staff costs used in taxable work via claiming GST NZ.
- File on the basis you elected. Many firms use payments basis when clients pay late: invoice basis vs payments basis.
In practice
Use case: Wellington law firm
Situation: $28,000 exclusive fees plus $1,200 GST inclusive courier disbursements in one month. GST: $4,200 output on fees plus $156 GST embedded in courier (3÷23). Action: do not add another 15% on top of the courier inclusive total.
Use case: Auckland CA practice
Situation: Annual accounts and tax return $4,600 exclusive for a GST registered client. GST: $690. Client claims $690 input tax if the supply relates to their taxable activity. Action: show GST as its own line on taxable supply information.
Use case: Christchurch tax agent
Situation: Prepares IR3 files for 180 clients, turnover $95,000. GST: must be registered, charge 15% on service fees, claim GST on Xero and IRD list subscription. Action: register before the 12 month threshold surprise, not after an audit.
FAQs
01Do lawyers and accountants charge GST in New Zealand?
Yes. Legal and accounting professional fees are usually taxable supplies at 15% when the firm is GST registered. Most practices exceed the $60,000 threshold and quote fees exclusive of GST, then add 15% on the invoice.
02Are accounting and legal services exempt financial services?
No. Ordinary legal advice, tax compliance, audit work and bookkeeping are not exempt financial services. Exempt financial services include many loans, mortgages, interest and share trading supplies. Financial planning has a split: some planning fees are taxable and some implementation or administration fees are exempt under IRD rules.
03How is GST handled on legal disbursements?
If the third party charge included GST, pass that GST through on the client recovery. If the underlying payment was exempt, such as many court filing fees, recover the amount without adding another 15%. Do not mark up exempt government fees with GST.
Publisher path: About Us and Contact Us. Settlement payouts: GST on legal settlements and awards.
Last verified 1 September 2026 against Inland Revenue charging GST, exempt supplies, GST guide IR375, taxable supply information, and the Goods and Services Tax Act 1985. Ads may fund this free site. Not tax advice.